Strong sales and tight inventory boost home prices

NAR: Median home price in October up 11.1 percent from a year ago

BY INMAN NEWS, MONDAY, NOVEMBER 19, 2012.

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Housing trend image via Shutterstock.

A combination of rising sales and the lowest inventory in six years helped existing-home prices post annual gains for the eighth month in a row in October, the National Association of Realtors said today.

Sales of existing homes were up 2.1 percent from September to October and 10.9 percent from a year ago, to a seasonally adjusted annual rate of 4.79 million.

At $187,600, the national median price for all housing types including single-family homes, townhomes, condominiums and co-ops was up 11.1 percent from a year ago. The national median price last posted eight consecutive months of annual gains before the crash -- from October 2005 to May 2006.

Also released today, a survey by the National Association of Home Buildersshowed builder confidence rose in November for the seventh month in a row to its highest point since May, 2006.

Rising home prices are boosting home equity, and NAR Chief Economist Lawrence Yun thinks the improvement could be even greater next year.

"Rising home prices have already resulted in a $760 billion growth in home equity during the past year," Yun said in a statement. "Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year."

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NAR estimated there were 2.14 million existing homes listed for sale at the end of October, a 5.4-month supply at the current sales pace. That's the tightest inventory since February 2006, when the months' supply of homes stood at 5.2 months.

October's inventory is down from a 5.6-month supply in September, and represents a 21.9 percent decline from the 7.6-month supply that existed a year ago. Many analysts view a six-month supply of housing as an even balance between buyer and seller demand.

Homes were on the market for a median of 71 days in October, down 26 percent from a year ago when the time to sell an existing home took a median of 96 days.

First-time buyers accounted for 31 percent of purchasers in October, down from last October's 34 percent.

Distressed homes accounted for 24 percent of all existing-home sales in October -- down from 28 percent last October -- with an even split between foreclosures and short sales. Foreclosures and short sales sold for 20 percent and 14 percent, respectively, below market value.

All-cash deals accounted for 29 percent of October's sales -- the same as last year and a percentage point higher than September. Investors accounted for 20 percent of existing home sales in October.

Read More: http://www.inman.com/news/2012/11/19/strong-sales-and-tight-inventory-boost-home-prices

Home sales climb 2% in October

NEW YORK (CNNMoney) -- The pace of sales for previously owned homes rose in October, despite the devastation of Superstorm Sandy, in the latest sign of improvement for the long-battered housing market.

Existing home sales rose to an annual rate of 4.79 million, seasonally adjusted, the National Association of Realtors reported on Monday. That's up 2.1% from September, when the revised annual rate of existing home sales was 4.69 million. And it's an increase of 11% year-over-year, when the annual rate was 4.32 million.

That was also stronger than the forecast from analysts at Briefing.com, which called for an annual rate of 4.7 million existing home sales in October.

The National Association of Realtors said sales had gone up nationwide, "even with some regional impact from Hurricane Sandy," the deadly storm that caused massive disruptionsin the Northeast at the end of October.

Lawrence Yun, the association's chief economist, said the market is being driven by "growing demand with limited inventory" but it could run into strong headwinds from Sandy going forward.

"We expect an impact on Northeastern home sales in the coming months ... in storm-impacted regions," he said.

Related: Most affordable cities for homebuying

Home buyers are being lured by low mortgage rates. Last week, mortgage rates dropped again, pushing 15-year and 30-year fixed-rated loans to record lows.

Read more:  http://money.cnn.com/2012/11/19/real_estate/existing-home-sales/index.html?source=linkedin