NAR: Inventory shortages in West, Florida put pressure on prices

By Inman News, Wednesday, September 19, 2012

Sales of existing homes were up 7.8 percent from July to August to a seasonally adjusted annual rate of 4.82 million, helping boost the national median home price for the sixth month in a row, the National Association of Realtors said today

Looking back a year, home sales increased 9.3 percent in August. At $187,400, the national median price for all housing types including single-family homes, townhomes, condominiums and co-ops was up 9.5 percent from a year ago.

NAR is now forecasting that despite tight credit conditions, 2012 home sales will be up 8 to 10 percent from last year. If most qualified buyers could obtain financing, NAR projects home sales would be about 10 to 15 percent stronger.

“The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is (a) testament to the sizable stored-up housing demand that accumulated in the past five years,” said Lawrence Yun, NAR’s chief economist, in a statement. “The housing market is steadily recovering with consistent increases in both home sales and median prices.”

NAR estimated there were 2.47 million existing homes listed for sale at the end of August, a 6.1-month supply at the current sales pace. That’s down from a 6.4-month supply in July, and an 18.2 percent decline from the 8.2-month supply on the market a year ago. Many analysts view a six-month supply of housing as an even balance between buyer and seller demand.

Yun said inventory shortages in markets in the West and Florida are placing pressure on prices.

First-time buyers accounted for 31 percent of purchasers in August, down from 34 percent in July.

Distressed homes sold for 19 percent below market value, on average, and accounted for 22 percent of August’s sales.

All-cash deals accounted for 27 percent of August’s sales — the same as July and down two percentage points from last August.

Existing-home sales, August 2012

Seasonally adjusted annual rate 4.82 million
% change from August 2011 +9.3%
% change from July 2012 +7.8%
   
National median price $187,400
% change from August 2011 +9.5%
   
Unsold inventory (months’ supply) 6.1
Share of all-cash buyers 27%
Share of investor buyers 18%
Share of first-time buyers 31%
Share of distressed sales 22%

Source: National Association of Realtors

All U.S. regions saw existing-home sales and prices swell in August from a year ago — except the West, where sales were even — with the Midwest leading the way with a 17.9 percent year-over-year increase to 1.12 million units. The median price in the Midwest also rose in August from a year ago, up 7.8 percent to $152,400.

In the West, where sales remained even on an annual basis, median prices jumped 16.3 percent from last August to $242,000, the largest yearly proportional price jump of any region, with the report noting low inventory being a factor in the increase.

The annual pace of sales grew in the South and Northeast, too, up 11.1 percent and 8.6 percent, respectively. Median prices rose as well on a yearly basis in the regions, up 6.5 percent in the South and 0.6 percent in the Northeast.