Existing Home Sales Up

The National Association of Realtors recently published an article entitled December Existing-Home Sales Show Uptrend on January 20, 2012. The article was written by Walter Molony. Click on the link to view entire article.

The National Association of Realtors said Friday that sales increased 5% last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase for sales. For the year, sales totaled only 4.26 million. While that’s up from 4.19 million the previous year, it’s below the 6 million that economists equate with healthy housing markets.  Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. Home construction picked up in the final quarter of 2011The median sales price rose 2.3% to $164,500 in December. 2011. Still the housing market has a long way to go before it is fully recovered from the housing bust four years ago. In the last four years, home sales have slumped under the weight of foreclosures, tighter credit and falling prices. Fewer first-time buyers, who are critical to a housing recovery, are in the market for a home. Purchases by that group fell last month to make up only 31% of sales. That’s down from 35% in November. In healthy markets, first-time buyers make up at least 40%.  At the same time, homes at risk of foreclosure made up a third of all sales last month. In healthy markets, they comprise 10% of sales.

Investors are increasingly buying homes priced under $100,000. Still, Sales rose across the country in December. They increased on a seasonal basis by more than 10% in the Northeast, 8.3% in the Midwest, 2.9% in the South and 2.6% in the West.  The glut of unsold homes declined to 2.38 million homes. At last month’s sales pace, it would take nearly 7 months to clear those homes. Analysts say a healthy supply can be cleared in about six Months.