Existing Home Supply Down 40% In Last 6 Months

Filed under Existing Home Sales by on February 24, 2011 at 7:47 am {no comments}

Existing Home Supply (Jan 2010 - Jan 2011)Home resales rose another 2.7 percent last month, according to the National Association of REALTORS® monthly report.

An “existing home” is a home that’s been previously occupied and is not considered .

The number of existing homes sold on a rolling 12-month basis is now at its highest point since May 2010, the month before the federal homebuyer ended. It’s also up some 40% since July 2010, the month after the tax credit ended.

But that’s not the biggest story in the Existing Home Sales report. The precipitous decline in home inventory deserves more attention.

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Home Supplies Plummet, Putting Pressure On Prices To Rise

Filed under Existing Home Sales by on January 21, 2011 at 7:48 am {no comments}

Existing Home Supply 2009-2010 surged 12 percent last month, closing 2010′s housing market with strength. An “existing home” is a home that cannot be categorized as ; a resale.

According to the National Association of REALTORS®, seasonally-adjusted, annualized Existing Home Sales figures climbed by more than a half-million units in December as compared to November. It’s the 3rd straight month of home resale improvement nationwide.

Sales volume is now as high as it’s been since May 2010 — just after the federal home buyer ’s expiration.

In addition, the number of months needed to sell the complete, current home inventory at the current pace of sales fell by 1.4 months, tying December for the biggest one-month home supply improvement in 2 years.

It’s yet another signal that the housing market is in recovery. Not that this data should surprise anyone. November’s Pending Home Sales report told us to expect it two weeks ago.

Broken down by buyer-type, home sales split as follows:

  • First-time home buyers : 33% of all sales
  • Repeat buyers : 47% of all sales
  • Real estate investors : 20% of all sales

Cash buyers represented 29 percent of all transaction, down 2 ticks from November. This may suggest that mortgage guidelines are loosening — another sign of economic improvement.

So, take note, Chicago home buyers. This spring, along with mortgage rates, home values should rise, too. Expect less “bang for your buck” as the housing recovery takes hold here in Wicker Park and across the nation.

The best deals of the year may be the ones made this month.

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Home Inventory Dwindles Into The New Year

Filed under Existing Home Sales by on December 23, 2010 at 7:48 am {no comments}

Existing Home Supply (Nov 2009 - Nov 2010) jumped another 6 percent in November, the report’s third month of improvement since bottoming in July.

According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October.  An “existing home” is a home that cannot be considered .

Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months.

November’s strong is yet another signal to buyers in Oak Park that the housing market’s foundation has been rebuilt, and that a rebound is imminent.  It’s helped that there are great “deals” on which for buyers to pounce.

In November, short sales and foreclosures accounted for one-third of all existing homes sold, and carried an average price discount of 10 percent and 15 percent, respectively, as compared to non-.

Repeat buyers continue to power the market, too, representing more than half of all home buyers.

  • First-time buyers : 32% of all buyers
  • Investors : 19% of all buyers
  • Repeat buyers : 51% of all buyers

This breakdown suggests that housing has regained its footing. First-time buyers can’t support a market long-term like repeat buyers can and, as compared to 12 months ago, the percentage of repeat buyers is now up 14 points.

Home buyers take note. Raw sales volume is rising and available inventory is dropping. Basic supply-and-demand tells us that this will lead home prices higher. Furthermore, mortgage rates are rising quickly, increasing the cost of homeownership.

If buying a home is a part of your plan for 2011, consider accelerating your purchase time frame. Existing homes account for more than 80% of homes sold nationwide. If the market keeps improving like this, your home affordability will worsen.

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October Existing Home Sales : Buyers And Sellers In Balance

Filed under Existing Home Sales by on November 24, 2010 at 7:46 am {no comments}

Existing Home Supply (Oct 2009-2010)After two months of surging sales, home resales fell by 100,000 units last month to 4.4 million homes nationwide.

October’s tally is slightly below the report’s 6-month rolling average, according to the National Association of REALTORS® — a time span which includes this year’s $8,000 federal home buyer ’s tail end.

Housing statistics have been wildly inconsistent during that period.

For the future of Chicago housing markets, though, it’s encouraging that first-time and investment property buyers were both outnumbered by “move-up” buyers; buyers that have sold their respective homes in favor of larger ones. It’s the move-up buyers that power housing.

In October, buyer profiles broke down as follows:

  • First-time buyers : 32 percent of all buyers, unchanged from September
  • Repeat home buyers : 49 percent of all buyers, down one tick from September
  • Investors : 19 percent of all buyers, up one tick from September

As a point of comparison, first-timers represented 50 percent of all purchases in October 2009.

For Wicker Park home buyers, October’s Existing Home Sales report is neither weak nor strong. It signals that, with mortgage rates low and home affordability high, housing may be reaching some form of balance. Because — although home sales are down — are down, too.

We can infer that buyers outnumber sellers, but probably not by much. In most areas, negotiation leverage is still up for grabs.

At the current pace of sales, the complete housing stock would be depleted in 10.6 months.

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Existing Home Sales Jump; Housing Market Shows Spark

Filed under Existing Home Sales by on October 26, 2010 at 7:47 am {no comments}

Existing Home Sales (Sept 2009-Sept 2010) jumped 10 percent in September, the biggest monthly jump on record and a signal that the housing market may be returning to a normal sales pattern post-$8,000 federal .

Existing Home Sales counts home resales (i.e. not ) and 80 percent of home resales close within 45-60 days. It’s no surprise, therefore, September’s data is strong.

Throughout the July and August, mortgage rates were in free-fall, pushing home affordability to near-record levels. Concurrently, the number of homes available for sale climbed to multi-year highs.

“Deals” were in ample supply this summer and eager Oak Park home buyers snatched them up.

Some of these deals included “distressed properties”, a categorization that includes homes in various stages of foreclosure or short sale, accounted for 35 percent of all sales, an uptick of 1 percent from August.

According to the National Association of Realtors®, home resales split as follows:

  • First-time buyers : 32 percent of all buyers
  • Repeat home buyers : 50 percent of all buyers
  • Investors : 18 percent of all buyers

By contrast, in November 2009, first-timers accounted for more than half of all resales.

For Lincoln Park home buyers, September’s Existing Home Sales report foreshadows a more competitive housing market through the New Year. In addition to rising sales volume, are down by nearly 2 months from July.

At the current pace of sales, the complete housing stock would be depleted in 10.7 months.

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Existing Home Sales Rebound In August, Give Hope For Autumn

Filed under Existing Home Sales by on September 24, 2010 at 7:47 am {no comments}

Existing Home Supply (August 2009 - Augsut 2010)Sales of existing homes in recovered in August, perhaps the result of a post- normalization.

As compared to July, rose 8 percent in August, buoyed by falling interest rates and slow-to-rise home prices. There’s lot of “good deals” out there and home buyers in Chicago are taking advantage.

The housing gains are relative, however. August’s total units sold barely crossed 4 million and still trails the average figures of the last few years by close to 1 million units.

Despite that, the August Existing Home Sales report can be considered a strong one. This is for several reasons:

  1. Sales volume increased in August without tax credit or government intervention
  2. Sales growth is not limited by geography. All 4 regions — Northeast, Southeast, Midwest, and West — showed improvement last month.
  3. Repeat buyers are driving the market, representing 48 percent of sales, up from forty-three percent in July.

And, perhaps most important to the housing market market, the number of available home resales dropped by almost one full month last month.  At the current sales pace, the national inventory would be depleted in 11.6 months.

For home buyers, the data presents an interesting opportunity. With average mortgage rates rising from their best levels ever and home affordability cresting in places like Wicker Park , this autumn may represent the turn-around point for the housing market nationwide.

If you’re planning to move in early-2011, consider moving up your time frame.

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Existing Home Sales Plummet In July; Home Buyers Gain Leverage

Filed under Existing Home Sales by on August 25, 2010 at 7:47 am {no comments}

Existing Home Sales July 2009 - July 2010The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®’ report.

It’s a drop of 27 percent from June; single-family home resales are at the report’s lowest levels since May 1999.

Furthermore, because of the sharp drop in sales volume, home inventories are spiking.

Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.

Home supply was just 8.9 months in June.

For home sellers in Chicago , the Existing Home Sales report is a bit of bad news.  Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices.  It may also increase time-on-market.

For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.

It helps that home affordability is up, too. 

Although there’s reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today’s rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.

Mortgage rates are down 0.75 percent since mid-April.

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Home Resales Boom Into The End Of The Tax Credit; Home Values Seen Rising.

Filed under Existing Home Sales by on April 23, 2010 at 7:47 am {no comments}

rose in March, as expected. U.S. home buyers closed on 7 percent more homes as compared to February.

Furthermore, versus March 2009 — a month many people equate to the low point of the U.S. economy — sales volume was up 16 percent.

“Existing home sale” is the technical term for a home resale; a home previously inhabited by a person.  It’s the opposite of a “new home sale” which is a sale of a newly-constructed home.

Existing Homes Data is tracked by the National Association of Realtors® and a closer look at the March data reveals some other interesting notes:

  1. Year-over-year sales are higher for the 9th straight month
  2. Real estate investors represented 19 percent of all homes purchased
  3. First-time home buyers account for 44 percent of all buyers

Also worth noting is that the supply of available homes is down on a broader basis.  At the current rate of sales, the existing home inventory will be exhausted in 8 months.

Despite banks releasing foreclosures and into the Chicago market, that’s still one half-month less from February.

When supplies drops, home prices tend to rise. It suggests an underlying strength in housing that should support home prices through the next few months — especially as the home buyer finishes working its way through the system.

That said, real estate markets are local. You shouldn’t assume that what’s happening on the national level is also happening here at home.  Be sure to check with your real estate agent about local market conditions before making a decision to buy or sell.

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Existing Home Sales Indicate A Busy Spring

Filed under Existing Home Sales by on March 24, 2010 at 7:47 am {no comments}

As expected, the February Home Sales figure dipped relative to January.  It’s four straight months of lower month-over-month totals.  However, it’s actually pointing towards rising values.

November of 2009 was an exception.  The expiration of the flooded the market with buyers.  These were buyers that would have ordinarily been more evenly distributed through the winter months, instead, that “December-February” buyer bought sooner.

The trends and moving averages all point towards continued momentum in the real estate recovery.

The rumor that the market is soft may not last much longer.  When the first time home buyer credit was extended until April 30th, it created a spot for another huge spike in buyer traffic.  Buyer traffic means multiple offer situations and that means less power in negotiating.

The report is based on February’s closings which is really a reflection of buyer traffic in December and January.   The reality of today’s market is that there are more buyers than the stats are tracking.

Existing Home Sales should gain through March and April, pressuring home prices higher. And, by the time the press reports the gains, the best deals may already be gone.  Consider acting sooner rather than later.

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Existing Home Sales Dip Again, But Stay True To Trends

Filed under Existing Home Sales by on March 2, 2010 at 7:46 am {no comments}

Winter has been tough for home sales.

After a big drop of 17% December, the January report yielded a 7% slide.  An “existing home” is a home not being resold by a previous owner.  It essentially excluded only .

Existing Home Sales data on an annualized and adjusted basis shows:

      1. Sales volume is at its lowest levels since June 2009
      2. Sales volume fell below its 12-month rolling average
      3. are at a 5-month high

This mirrors the data from the government’s data released last week.  That report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.

This is not a crisis and hasn’t moved housing off of its rebound.  Home sales are always cyclical and outside forces always influence the market.  Now is no exception.

For one, home sales were so high in October and November due to the original November 2009 expiration.  Many buyers shifted out of December/January and into October/November.  This is a natural reason for the dip.

Over the long-term trend, the numbers came in near to what you’d expect as a rolling average.  A smaller, but important part was that January’s weather was awful from Mexico to Canada.  That will slow down home sales.

We’re seeing higher activity in February and March.  It’s unlikely that we’ll see a repeat of last Apri-November’s run, but there are enough buyers to support this housing rebound. The good news of the sagging sales reports is that today’s buyers may find home prices are lower and sellers are more willing to negotiate.

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