Homes Selling Faster, 69-Day Median at 'Historic Norms': Realtors

The typical amount of time it takes to sell a home is shrinking, falling back into the range of historic norms for a balanced market, according to the National Association of Realtors.
The median time a home was listed for sale on the market1 was 69 days in July, down 29.6 percent from 98 days in July 2011.
That’s far below the cyclical peak reached in 2009, the NAR said today.
But Realtors put out that the median reflects a wide range: one-third of homes purchased in July were on the market for less than a month, while one in five was on the market for at least six months.
In large part, the faster turnaround is a result of tighter inventories.
“A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country,” said Lawrence Yun, NAR chief economist. “This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”
At the end July there was a 6.4-month supply of homes on the market at the current sales pace, which is 31.2 percent below a year ago when there was a 9.3-month supply.
NAR’s data on home transactions over time shows that current market conditions are comparable with median selling time in balanced markets.
The median selling time is just over six weeks when existing-home sales average close to a six-month supply of homes in listed inventory, which is near the low end for market equilibrium, the NAR reported.
In balanced market conditions, home prices generally rise 1 to 2 percentage points above the overall rate of inflation as measured by the Consumer Price Index (CPI).
The NAR’s current forecast is for the median existing home price to rise 4.5 to 5 percent this year, and about 5 percent in 2013.
That is “somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges,” Yun said.
CPI growth is projected at 2.1 percent for 2012 and 2.3 percent next year.

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