Nationally, Existing-Home Sales Improve in July, Prices Continue to Rise: Compare to Flalger

The national median price is showing five consecutive months of year-over-year increases, according to the National Association of Realtors®.

Palm Coast, FL – August 22, 2012 – The National Association of Realtors® released its July existing-home sales report today. GoToby.com provides the report below with Palm Coast/Flagler County home sales data inserted in red print.

National Association of Realtors’ Report

Sales of existing homes rose in July even with constraints of affordable inventory, and the national median price is showing five consecutive months of year-over-year increases, according to the National Association of Realtors®.  Monthly sales rose in every region but the West, where inventory is very tight. The median selling price for single-family Flagler County homes for the first seven months of 2012 is $120,000, the same as for the first seven months of the previous year – no increase.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.3 percent to a seasonally adjusted annual rate of 4.47 million in July from 4.37 million in June, and are 10.4 percent above the 4.05 million-unit pace in July 2011. GoToby.com does not include townhomes and condominiums. There were 185 single-family Flagler County homes sold through MLS compared to 170 last July; an 8.2% increase. July was the 15th consecutive month of increased year-over-year home sales.

Lawrence Yun, NAR chief economist, said housing affordability conditions are very good.  “Mortgage interest rates have been at record lows this year while rents have been rising at faster rates.  Combined, these factors are helping to unleash a pent-up demand,” he said.  “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”

NAR is asking the government to expeditiously release the foreclosed properties it owns in inventory-constrained markets.

Given population and demographic demand, Yun said existing-home sales could be in a normal range of 5 to 5.5 million if all conditions were optimal.  “Sales may reach 5 million next year, but it will require more sensible lending standards and stronger job creation to push beyond that,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.55 percent in July from 3.68 percent in June; the rate was 4.55 percent in July 2011; recordkeeping began in 1971.

 “Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market,” Yun said.  “Furthermore, the higher median price naturally means more housing contribution to economic growth.”

The national median existing-home price² for all housing types was $187,300 in July, up 9.4 percent from a year ago.  The last time there were five back-to-back monthly price increases from a year earlier was in January to May of 2006.  The July gain was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.

Distressed homes³ – foreclosures and short sales sold at deep discounts – accounted for 24 percent of July sales (48.6% in Flagler County – 24.9% foreclosed and 23.8% lender-owned) (12 percent were foreclosures and 12 percent were short sales), down from 25 percent in June and 29 percent in July 2011.

Foreclosures sold for an average discount of 17 percent below market value in July, while short sales were discounted 15 percent.

  NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said pricing is the primary factor in determining how long homes stay on the market.  “Correctly priced homes, regardless of price range, are selling quickly these days,” he said.

 “Fully one-third of homes purchased in July were on the market for less than a month, and only 21 percent were on the market for six months or longer.  Sellers should carefully consider a Realtor’s ^® advice about marketing their homes,” Veissi said.

Total housing inventory at the end July increased 1.3 percent to 2.40 million existing homes available for sale, which represents a 6.4-month supply⁴ (less than four months in Flagler County) at the current sales pace, down from a 6.5-month supply in June.  Listed inventory is 23.8 percent below a year ago when there was a 9.3-month supply.

Yun said there are distortions in housing inventory.  “The total supply of housing inventory appears to be balanced in historic terms, but there are notable shortages in the lower price ranges which are limiting opportunities for first-time buyers,” he said.  “The low price ranges also are popular with investors, so entry-level buyers are at a disadvantage because many investors are making all-cash offers.”

First-time buyers accounted for 34 percent of purchasers in July, up from 32 percent in June; they were also 32 percent in July 2011.  Under normal conditions, entry-level buyers account for four out of 10 purchases.

All-cash sales slipped to 27  percent (54.6% in Flagler) of transactions in July   from 29 percent (59.4% Flalger) in June; they were 29 percent (49.5% in Flagler) in July 2011.  Investors, who account for the bulk of cash sales, purchased 16 percent of homes in July, down from 19 percent in June; they were 18 percent in July 2011.

Single-family home sales increased 2.1 percent to a seasonally adjusted annual rate of 3.98 million in July from 3.90 million in June, and are 9.9 percent above the 3.62 million-unit level in July 2011.  The median existing single-family home price was $188,100 in July ($129,000 in Flagler), up 9.6 percent from a year ago.

Existing condominium and co-op sales rose 4.3 percent to a seasonally adjusted annual rate of 490,000 in July from 470,000 in June, and are 14.0 percent higher than the 430,000-unit pace a year ago.  The median existing condo price was $180,700 in July, which is 7.7 percent above July 2011.

Regionally, existing-home sales in the Northeast rose 7.4 percent to an annual level of 580,000 in July and are 13.7 percent above July 2011.  The median price in the Northeast was $254,200, up 3.5 percent from a year ago.

Existing-home sales in the Midwest increased 2.0 percent in July to a pace of 1.04 million and are 16.9 percent higher than a year ago.  The median price in the Midwest was $154,100, up 5.8 percent from July 2011.

In the South, existing-home sales rose 2.3 percent to an annual level of 1.77 million in July and are 8.6 percent above July 2011.  The median price in the region was $162,600 ($129,000 in Flagler), up 6.6 percent from a year ago.

Existing-home sales in the West were unchanged at an annual pace of 1.08 million in July but are 5.9 percent higher than a year ago.  With pronounced inventory shortages, the median price in the West was $238,600, a jump of 24.5 percent from July 2011.

NOTES:  For local information, please contact the local association of Realtors^® for data from local multiple listing services.  Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

¹Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from multiple listing services.  Changes in sales trends outside of MLSs are not captured in the monthly series.  A rebenchmarking of home sales is done periodically using other sources to assess the overall home sales trend, including sales not reported by MLSs.

Existing-home sales differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit.  Because of these differences, it is not uncommon for each series to move in different directions in the same month.  In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months.  Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity.  For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.  However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began.  Prior to this period, single-family homes accounted for more than nine out of 10 purchases.  Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

²The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to a seasonality in buying patterns.  Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.  Changes in the composition of sales can distort median price data.  Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

³Distressed sales (foreclosures and short sales), all-cash transactions, investors and first-time buyers and are from a monthly survey for the Realtors^® Confidence Index, posted at Realtor.org.

 ⁴Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).