Tight Home Inventories Favor Sellers, Prices Up 12% Over Year Ago

Tight Home Inventories Favor Sellers, Prices Up 12% Over Year AgoHousing inventory jumped 1.6 percent in March, but not enough to make a big dent in a mostly sellers’ market for existing homes, where the national median home price saw a 12 percent jump over a year ago.
The National Association of Realtors reported Monday that sales of existing homes declined slightly by 0.6 percent in March to a seasonally adjusted annual rate of 4.92 million in March, from a downwardly revised 4.95 million in February.
But resales remain 10.3 percent higher than the 4.46 million-unit pace in March 2012.
Sales have been above year-ago levels for 21 consecutive months, while prices have seen 13 consecutive months of year-over-year price increases.
The national median existing-home price for all housing types was $184,300 in March, which is 11.8 percent higher than March 2012.
The March home-price increase is the strongest since November 2005, which saw a 12.9 percent jump from a year earlier. The last time there were 13 consecutive months of year-over-year price increases was from May 2005 to May 2006.
Lawrence Yun , NAR chief economist, said the market is seeing more demand than supply.
“Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity,” Yun said. “In the same time-frame, housing inventories have trended much lower, which is continuing to pressure home prices.”
The good news, he added, is that home construction is rising and low mortgage rates are still at historically low levels.
However, mortgage underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.
Distressed homes – foreclosures and short sales – accounted for 21 percent of March sales, down from 25 percent in February and 29 percent in March 2012. Thirteen percent of March sales were foreclosures, and 8 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in March, while short sales were discounted 13 percent.
Homes are selling much faster, said NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif.
“The typical home sold in March was on the market for one month less than it took to sell a year ago,” Thomas said. “Multiple bidding is becoming more common, and more homes are selling above the asking price, so buyers need to move quickly and follow their Realtor®’s advice for contingencies when making contract offers.”
The median time on market for all homes was 62 days in March, down from 74 days in February and is 32 percent below 91 days in March 2012.
Short sales were on the market for a median of 81 days, while foreclosures typically sold in 46 days and non-distressed homes took 66 days. Thirty-seven percent of all homes sold in March were on the market for less than a month.

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