After a sizable jump in December, home sales started off 2015 with a stumble, RE/MAX reported Tuesday.
Analyzing transactions from 53 major metros nationwide, RE/MAX's latest National Housing Report showed home sales plunged 32.1 percent from December to January, more than wiping out the prior month's 14.4 percent gain. Despite the plummet, the company isn't sounding the alarm on housing, noting that transaction volumes usually drop as the year changes.
Furthermore, RE/MAX observed that sales last year improved significantly in the spring and summer months and in three of 2014's last four months, indicating a more positive trend may be in the offing.
"As we saw last year, home sales started rather slow, but rebounded during the prime selling months," said Dave Liniger, CEO, chairman, and co-founder of RE/MAX. "In fact, 2014 ended with a respectable 4.9 million sales of existing homes, which we believe represents a sustainable rate of growth. So, we still need a few more months of data to tell how this market will perform in 2015."
Compared to a year ago, January sales were down 3.9 percent.
Also playing a role in January's drop in closings was a tightening in inventory. According to RE/MAX, the supply of homes for sale last month was down 10.9 percent year-over-year and 5.2 percent month-over-month. Inventory has dropped on an annual basis for three straight months now after a period of improvement.
Based on January's sales pace, RE/MAX estimates the months supply of inventory fell to 5.2, slipping away from the ideal six-month balance between buyers and sellers.
Falling supply set the stage for home prices to jump, at least on an annual basis. The median sales price for all homes sold in January was $189,000, RE/MAX reported, down 3.3 percent from December but up 11.2 percent in January 2014.
On a year-over-year basis, the median sales price has now risen for 36 straight months, according to RE/MAX.
Among the 53 metro areas tracked, 48 reported higher sales prices than a year ago. The biggest increase was reported in Detroit, which posted a 19.3 percent jump in prices. That was followed by Augusta (14.3 percent), Omaha (13.3 percent), Fargo (13 percent), and Denver (12.5 percent).