Buying or selling a home is obviously one of the most exciting, challenging and emotional things any of us will ever be lucky enough to do. While the majority of us make the decision to buy or sell based on a lifestyle needs, it would be naïve to think we don’t lay awake at night throughout the process wondering and worrying about the financials. That’s why it is valuable to look at the monthly Existing Homes Sales report issued by the National Association of Realtors (NAR).
This report spurs a flurry of housing-related articles that you will see today and tomorrow with so many using it to gain perspective about the state of the U.S. economy and the housing market.
Today’s report shows that the housing industry continues its return towards normalcy. Along with a look at December, the report highlights what happened in 2013. There were 5.09 million homes (not including new ones) sold in the U.S. last year This was 9% higher than 2012 and the strongest since 2006 when 6.48 million homes were sold. The median price of these homes was $197,100, an 11.5% increase over 2012.
There are a few other really interesting stats. The sales of distressed properties (foreclosures and short sales) have dropped substantially to 14% in December compared to 24% in December 2012. So while that is good news, what remains a concern is the current lack of inventory, the amount of homes currently for sale.
NAR reports that there are 1.86 million homes currently on the market, a 4.6 month supply. While this sounds like a lot, this categorizes most as “seller’s markets”. A six-month supply is considered balanced with more than that classified as a “buyers’ market.” It’s a simple supply/demand equation. Not enough homes for sale means buyers don’t have as much choices nor leverage during negotiations since there are likely more bidding for the same homes.
The homes that are on the market are selling quickly. The median time on market for all homes was 72 days in December with 28% selling in less than a month. Again, this fits the supply/demand model.
Clearly, homes are bought and sold by individuals with their own personal needs and national statistics do not shed light on local conditions. But it is clearly wise for those considering, thinking or dreaming about buying or selling a home, to take a moment and ask a Coldwell Banker agent what’s going on at home. If you don’t know any agents, go ahead and use www.coldwellbanker.com to find an office near you and reach out to the manager there.
Good luck and we’ll be back next month with NAR’s next report.