According to the National Association of Realtors’ (NAR) Chief Economist, Lawrence Yun, a market shift is occurring in the West region of the nation recording lower sales and soft price growth. “It is also the West region where consumers have expressed the weakest sentiment about home buying, largely due to lack of affordable housing inventory,” Yun said.
Shedding light on existing home sales, the latest report by NAR revealed an increase in sales the past month, wherein three of four major U.S. regions saw gains in sales activity.
Existing-home sales in the West declined 6.3 percent to an annual rate of 1.04 million in November, 15.4 percent below a year ago. Whereas the Northeast market recorded an increase at 7.2 percent. The South region grew 2.3 percent in home sales in November and existing-home sales in the Midwest rose 5.5 percent, the report found.
Total existing-home sales increased by 1.9 percent from October to an adjusted rate of 5.32 million in November, completing transactions including single-family homes, townhomes, condominiums, and co-ops. However, currently, sales reflect a drop by 7.0 percent from a year ago.
Yun thinks an increase in sales for two consecutive months is a positive sign for the housing market. He also pointed out that the November market was a mixed market with stabilizing home sales compared to recent months, though it saw a decline compared to a year ago. “Rising inventory is clearly taming home price appreciation,” he said.
The report also revealed the median existing-home price for all housing types in November went up by 4.2 percent from the past year—marking the 81st straight month of annual gains. Total housing inventory declined to 1.74 million, representing an increase from 1.67 million a year ago. Unsold inventory dropped from 4.3 last month to a 3.9-month supply at the current sales pace.
The report noted that forty-three percent of homes sold in November were on the market for less than a month. First-time buyers contributed to 33 percent of sales in November, it stated. Single-family home sales went up by 4.62 million in October and sit at a seasonally adjusted annual rate of 4.71 million in November. The median existing single-family home price was $260,500 in November, up 5.0 percent from November 2017.
Distressed sales – foreclosures and short sales were at 2 percent, the lowest in the history of the survey. Inventory is plentiful on the upper-end, but a mismatch between supply and demand exists at affordable price points,” Yun said.