Existing-home sale price for all housing types rose 7.9 percent year-over-year in June in the National Association of Realtors’ latest housing report. It’s the fourth straight month of yearly price increases, a streak that has not occurred since 2006.
On an upwardly revised 4.62 million sales in May, existing-home sales did fall a bit to a seasonally adjusted annual rate of 4.37 million in June, but that total is still 4.5 percent higher than in June 2011.
Lawrence Yun, NAR’s chief economist, pointed to lower housing inventory as the reason for the flagging sales data; listed inventory, according to NAR, is down 24.4 percent from last year, down from a 9.1-month supply to a 6.4-month.
“Despite the frictions related to obtaining mortgages, buyer interest remains solid,” Yun said. “But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix.
Other details in NAR’s report included:
- Distressed sales made up 25 percent of June’s sales, with 13 percent foreclosures and 12 percent short sales.
- First-time homebuyers accounted for 32 percent of purchases in the month.
- All-cash sales were 29 percent of transactions, up 1 percentage point from May; investors, who make up the majority of cash sales, accounted for 19 percent of home purchases in June, up from 17 percent in May.
- Regionally, sales were fairly consistent with the national average. In the Midwest, sales slipped 1.9 percent monthly but were up 14.6 percent from June 2011, and median price was up 8.4 percent; in the South, the 4.4 percent monthly decline was offset by a 5.5 percent yearly increase.
Tom Krettler, co-President of the Mainstreet Organization of Realtors and Realtor with RE/MAX Unlimited Northwest, said that inventory has also been falling in his region of Chicagoland, but it’s been doing so to the betterment of the area.
For some time, Krettler explained, inventory hovered around 13 months supply, but now, with buyer activity increasing, inventory is down to as low as 3-4 months in some areas, and some buyers are even having a hard time finding quality, “turn-key ready” properties, as he called them.
Going forward, Krettler said we’ll be seeing “a market trying to be normal,” as the Chicago markets work through existing REO inventories and prices begin to solidify.
“The big drops are behind us,” he said. “It’s going to be a period of tweaking.”