Existing-Home Sales Fade in December; 2017 Sales Up 1.1 Percent

Washington, D.C. – January 24, 2018 (nar.realtor) Existing-home sales subsided in most of the country in December, but 2017 as a whole edged up 1.1 percent and ended up being the best year for sales in 11 years, according to the National Association of Realtors®.

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Total existing-home sales(1), which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.1 percent in 2017 to a 5.51 million sales pace and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million).

In December, existing-home sales slipped 3.6 percent to a seasonally adjusted annual rate of 5.57 million from a downwardly revised 5.78 million in November. After last month’s decline, sales are still 1.1 percent above a year ago.

Lawrence Yun, NAR chief economist, says the housing market performed remarkably well for the U.S. economy in 2017, with substantial wealth gains for homeowners and historically low distressed property sales. “Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Yun. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”

Added Yun, “Closings scaled back in most areas last month for this same reason. Affordability pressures persisted, and the pool of interested buyers at the end of the year significantly outweighed what was available for sale.”

Real Estate Infographic

The median existing-home price(2) for all housing types in December was $246,800, up 5.8 percent from December 2016 ($233,300). December’s price increase marks the 70th straight month of year-over-year gains.

Total housing inventory(3) at the end of December dropped 11.4 percent to 1.48 million existing homes available for sale, and is now 10.3 percent lower than a year ago (1.65 million) and has fallen year-over-year for 31 consecutive months. Unsold inventory is at a 3.2-month supply at the current sales pace, which is down from 3.6 months a year ago and is the lowest level since NAR began tracking in 1999.

“The lack of supply over the past year has been eye-opening and is why, even with strong job creation pushing wages higher, home price gains – at 5.8 percent nationally in 2017 – doubled the pace of income growth and were even swifter in several markets,” said Yun.

First-time buyers were 32 percent of sales in December, which is up from 29 percent in November and unchanged from a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017(4) – revealed that the annual share of first-time buyers was 34 percent.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage inched higher for the third straight month to 3.95 percent in December from 3.92 percent in November. The average commitment rate for all of 2017 was 3.99 percent.

“Rising wages and the expanding economy should lay the foundation for 2018 being the turning point towards an uptick in sales to first-time buyers,” said Yun. “However, if inventory conditions fail to improve, higher mortgage rates and prices will further eat into affordability and prevent many renters from becoming homeowners.”

Properties typically stayed on the market for 40 days in December, which is unchanged from November and down from a year ago (52 days). Forty-four percent of homes sold in December were on the market for less than a month.

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in December were San Jose-Sunnyvale-Santa Clara, Calif.; San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; and Stockton-Lodi, Calif.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says improving the new tax law is a top priority for Realtors® in 2018. “Especially in high-cost, high-taxed markets, there’s still big concern that the overall structure of the final bill diminishes the tax benefits of homeownership in a way that would adversely affect home values and sales over time,” she said. “As the housing market adjusts to the new law, Realtors® will be listening to their clients and communicating to lawmakers ways to ensure owning a home is truly incentivized in the tax code.”

All-cash sales were 20 percent of transactions in December, which is down from 22 percent in November and 21 percent a year ago. Individual investors, who account for many cash sales, purchased 16 percent of homes in December, up from 14 percent both last month and a year ago. For the year, all-cash sales averaged 21 percent of sales (23 percent in 2016), and investor sales were at 15 percent (14 percent in 2016).

Distressed sales(5) – foreclosures and short sales – were 5 percent of sales in December, up from 4 percent in November but down from 7 percent a year ago. Four percent of December sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales declined 2.6 percent to a seasonally adjusted annual rate of 4.96 million in December from 5.09 million in November, but are still 1.0 percent above the 4.91 million pace a year ago. The median existing single-family home price was $248,100 in December, up 5.8 percent from December 2016.

Existing condominium and co-op sales fell 11.6 percent to a seasonally adjusted annual rate of 610,000 units in December, but are still 1.7 percent above a year ago. The median existing condo price was $236,500 in December, which is 6.4 percent above a year ago.

Regional Breakdown
December existing-home sales in the Northeast fell 7.5 percent to an annual rate of 740,000, and are now 2.6 percent below a year ago. The median price in the Northeast was $261,400, which is 3.0 percent above December 2016.

In the Midwest, existing-home sales dipped 6.3 percent to an annual rate of 1.33 million in December, but are still 1.5 percent above a year ago. The median price in the Midwest was $191,400, up 7.8 percent from a year ago.

Existing-home sales in the South decreased 1.7 percent to an annual rate of 2.30 million in December, but are still 3.1 percent higher than a year ago. The median price in the South was $221,200, up 5.8 percent from a year ago.

Existing-home sales in the West declined 1.6 percent to an annual rate of 1.20 million in December, and are now 0.8 percent below a year ago. The median price in the West was $367,400, up 7.3 percent from December 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: 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.

1. Existing-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. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, 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 data 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.

2. The median price is where half sold for more and half sold for less; medians are more typical of market conditions 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 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 additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3. Total 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, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4. Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5. Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

NOTE: NAR’s Pending Home Sales Index for December is scheduled for release on January 31, and Existing-Home Sales for January will be released February 21; release times are 10:00 a.m. ET.

Media Contact:

Adam DeSanctis
(202) 383-1178
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California Home Price Closes Year on High Note as Sales Moderate in December

Housing market posts solid performance in 2017, C.A.R. reports

– Existing, single-family home sales totaled 420,960 in December on a seasonally adjusted annualized rate, down 4.4 percent from November and up 1.4 percent from December 2016.

– December’s statewide median home price was $549,560, up 0.5 percent from November and up 7.6 percent from December 2016.

– Housing inventory hit the lowest level observed in 13 years, with the unsold inventory index falling to 2.5 months in December.

Los Angeles, CA – Jan. 22, 2018 (PRNewswire-USNewswire) Amid the lowest housing inventory levels in more than 13 years, existing home sales still eked out a year-over-year gain, while the median sales price posted a solid annual increase, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

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Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 420,960 units in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The December sales figure was down 4.4 percent from the 440,340 level in November and up 1.4 percent compared with home sales in December 2016 of a revised 415,280.

For 2017 as a whole, a preliminary 423,760 homes closed escrow in California, up 1.4 percent from 2016’s pace of 417,720. After a strong first quarter start to 2017, sales momentum lost steam throughout the remainder of the year, and year-to-date sales growth declined steadily to hit the lowest level at the end of the year.

“A severe shortage of homes for sale continues to push up home prices and erode affordability, which in turn is subduing home sales,” said C.A.R. President Steve White. “What’s more, with the passage of the tax reform bill that makes homebuying less attractive, homeownership costs will increase for many, which could reduce the desire and demand for buying a home.”

The statewide median price continued to grow at a strong pace over last year and remained above the $500,000 mark for the tenth straight month. The $549,560 December median price was 0.5 percent higher than November’s $546,820 and 7.6 percent higher than the revised $510,560 recorded in December 2016. The year-over-year price gain has been growing at or above 7 percent for six of the past seven months.

“California’s housing market turned in a respectable performance throughout 2017, with home sales increasing 1.4 percent and the median price climbing 6.9 percent for the year as a whole to reach $537,860 in 2017,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “Looking ahead, the market will remain solid but both sales and prices will be impacted by inventory shortages, impending interest rate hikes, and general economic factors including the effects of tax reform.”

Other key points from C.A.R.’s December 2017 resale housing report include:

  • All of the major regions posted year-over-year sales declines, with sales in the Los Angeles metro region dropping 7.1 percent, the Inland Empire decreasing 3.5 percent, and sales in the San Francisco Bay Area dipping 0.3 percent from last year.
  • Sales dropped in five of six counties in the Southern California region, with both Ventura and Orange County decreasing by double digits. A supply shortage and affordability were likely factors in the decline. Sales in Los Angeles, San Diego, and Riverside also dropped moderately when compared to last year, while sales in San Bernardino remained virtually unchanged.
  • Home prices across the state continued to grow in general in December. Forty-five of the 51 reported counties recorded a year-over-year price increase, with 19 of them growing at double-digit rates.
  • With housing inventory at the tightest level among all regions across the state, the Bay Area region continued to appreciate the most with a 14.1 percent growth rate from the previous year. Seven of the nine Bay Area counties recorded a year-over-year increase in median price of at least 10 percent. Santa Clara prices surged the most at 34.7 percent.
  • Statewide active listings continued to decline in December, dropping 12 percent from a year ago. Since the beginning of the year, active listings have declined by more than 10 percent every month, and the number of available listings for sale has trended downward for more than two years.
  • The available supply of homes hit the lowest level observed since June 2004, with the statewide unsold inventory index dropping to 2.5 months in December from 2.9 months in November. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 2.6 months in December 2016.
  • The median number of days it took to sell a single-family home remained low at 25 days in December, compared with 32 days in December 2016.
  • C.A.R.’s sales price-to-list price ratio* was 98.7 percent statewide in December, 98.9 percent in November, and 98.1 percent in December 2016.
  • The average statewide price per square foot** for an existing, single-family home statewide was $265 in December, up from $246 in December 2016.
  • Mortgage rates edged higher in December as 30-year, fixed-mortgage interest rates averaged 3.95 percent in December, up from 3.92 percent in November and from 4.2 percent in December 2016, according to Freddie Mac. The five-year, adjustable mortgage interest rate also ticked higher in December to an average of 3.39 percent from 3.24 percent in November and from 3.23 percent in December 2016.

Graphics (click links to open):

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 39 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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Nearly One Quarter of 2017 U.S. Home Sales Were Above the Asking Price

– On average, homes that sold above their list price went for $7,000 over the asking price

– The share of U.S. home sales that were above the listed price increased from 17.8 percent in 2012 to 24.1 percent in 2017.

– The typical price increase for homes that sold above the listed price was 3.1 percent.

– More than half of home sales in San Jose, San Francisco, Salt Lake City and Seattle went for more than the listed prices.

Seattle, WA – Jan. 11, 2018 (PRNewswire) Buyers paid more than the asking price in nearly one quarter (24 percent) of U.S. home sales in 2017, netting sellers an additional $7,000 each. Five years ago, 17.8 percent of final sale prices were higher than the asking price, according to a new Zillow® analysis(i).

Over the past year the American housing market has been struck by the combination of strong demand and limited supply. Young adult renters are increasingly feeling confident enough to buy, but they are entering a market with very few homes for sale, as inventory has been steadily declining for almost three years. Low interest rates have buoyed buyers’ budgets, raising the limits on what they can afford – and may be willing – to pay.

Homes sell quickly in such a competitive market, with the typical U.S. home selling in 80 days, including the time it takes to close on the sale. In San Jose, San Francisco and Seattle, the average home sells in less than 50 days. Fierce competition means buyers may not win a home on their first offer. The typical buyer spends more than four months home shopping and has to make multiple offers before an offer is accepted, according to the 2017 Zillow Group Consumer Housing Trends Report.

“Low interest rates and strong labor markets with high-paying jobs have allowed home buyers in some of the country’s priciest housing markets to bid well over asking price,” said Zillow Senior Economist Aaron Terrazas. “In the booming tech capitals of the California Bay Area and Pacific Northwest, paying above list price is now the norm. In the face of historically tight inventory, buyers have had to be more aggressive in their offers. We don’t expect this inventory crunch to ease meaningfully in 2018, meaning buyers will be facing many of the same struggles this year.”

In San Jose, Calif., San Francisco, Salt Lake City and Seattle, more than half of all homes sold last year went for above the list price. The average home sold above list in San Jose netted sellers an additional $62,000, the largest difference between list and sale price of the metros analyzed.

Over the past five years, Seattle saw the greatest increase in the share of sales that were above the asking price, from 20 percent of home sales in 2012 to 52 percent of sales in 2017. The amount over asking price grew as well, from 2.5 percent to 5.3 percent above the listed price.

Miami homes were least likely to sell for more than the listed price last year, followed by Virginia Beach and New Orleans.

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Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Existing-Home Sales to Grow 3.7 Percent in 2018, but Inventory Shortages and Tax Reform Effects Loom

Chicago, IL – November 3rd, 2017 (PRNewswire) The steadily improving U.S economy, sustained job growth, and rising confidence that now is a good time to buy a home should pave the way for an increase in existing-home sales in 2018, but continued supply shortages, and passage of a tax bill that disincentives homeownership, threaten to handcuff what should be stronger activity. That is according to a residential housing and economic forecast session here at the 2017 REALTORS® Conference & Expo.

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Lawrence Yun, chief economist at the National Association of Realtors®, presented his 2018 housing and economic forecast and was joined onstage by Ken Rosen, chairman of Rosen Consulting Group and UC Berkeley’s Fisher Center for Real Estate and Urban Economics. Rosen addressed the primary causes for the depressed U.S. homeownership rate and shared his proposed ideas, highlighted in a white paper released earlier today, on how to ensure more creditworthy households can enjoy the personal and financial benefits of owning a home.

“Despite considerable demand all year, pending sales have lost a step in recent months because low supply is pushing prices higher and making homebuying less affordable in several parts of the country,” said Yun.

With a few months of data remaining in 2017, Yun estimates that existing-home sales will finish at a pace of 5.47 million – the best since 2006 (6.47 million), but only a modest improvement (0.4 percent) from 2016 (5.45 million). In 2018, sales are forecast to expand 3.7 percent to 5.67 million. The national median existing-home price is expected to rise to around 5.5 percent this year and next year.

Yun and Rosen, however, both cautioned that the House Ways and Means Committee’s release yesterday of its legislative proposal to overhaul the American tax code could very well affect home sales and prices next year and beyond. The tax bill in its current form is a direct tax hike on homeowners and nullifies the homeownership incentive for all but the top 5 percent of tax filers. Earlier this year, NAR released a full analysis of the House Republican blueprint for reform, finding that it could negatively affect home values by about 10 percent and raise taxes on middle-class homeowners by an average of $815.

Much of Yun and Rosen’s presentation focused on the reasons why many would-be buyers are not reaching the market. NAR’s 2017 Profile of Home Buyers and Sellers, released earlier this week, revealed that first-time buyers were only 34 percent of sales over the past year, which was the fourth lowest since the survey began 36 years ago.

Rosen, presenting findings from Rosen Consulting Group’s three white papers released this year on the depressed homeownership rate, said a perverse mix of affordability challenges, student loan debt, tight credit conditions and housing supply shortages continue to hamper many households from owning a home. This is despite extremely low mortgage rates that should be fostering the biggest for-sale housing boom in American history.

“Ownership rates are currently below their peak across the younger age groups and in cities that have seen sharp price increases, and it’s not a good thing,” said Rosen, “A higher rate of homeownership makes sense. It is so important to the financial health of the economy. Homeownership helps households accumulate wealth over time, reduces inequality, increases investments in communities and boosts economic growth.”

According to Yun, the biggest impediment to sales right now and into next year is the massive shortage of supply in relation to overall demand. The lagging pace of new home construction in recent years is further creating a logjam in housing turnover. Without enough new homes on the market, homeowners are typically staying put for a longer period of time before selling, typically 10 years, which is keeping inventory low and hurting affordability.

“The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent,” said Yun. “Despite improving confidence this year from renters that now is a good time to buy a home, the inability for them to do so is causing them to miss out on the significant wealth gains that homeowners have benefitted from through rising home values.”

Pointing to Los Angeles and the Bay Area as examples of areas with significant affordability constraints, Yun said unhealthy levels of price appreciation are also occurring in many other markets with strong job growth, but without the commensurate rise in housing starts. As a result, the ability to buy a home has become extremely difficult for even those with well-paying jobs and is forcing households to flee expensive areas in the West and Mountain regions for more affordable parts of the country. This in turn could affect future job growth in these areas and ultimately soften housing demand.

Although Yun forecasts single-family housing starts to jump 9.4 percent to 950,000 next year, this is still below the 50-year average of around 1.2 million starts. New single-family home sales are likely to total 606,000 this year and rise to around 690,000 in 2018.

Rosen agreed with Yun’s remarks that a significant boost in residential construction is needed to improve affordability and increase sales. He explained that the white paper released today, “Rebuilding the American Dream: Strategies to Sustainably Increase Homeownership,” identifies 25 ideas to bolster homeownership. They include: overriding restrictive zoning laws, promoting modular construction [to increase supply], a down payment savings program, tackling the burden of student debt, and a nationwide counseling program for homeowners who previously experienced foreclosure and may be hesitant to consider buying a home again, among others.

“A willingness to embrace new ideas will go a long way towards easing the constraints of low supply, student debt and weaker affordability that are currently suppressing homeownership,” said Rosen.

After two consecutive quarters of economic growth of 3 percent, Yun expects GDP to come in around 2.2 percent for the year and to expand to 2.7 percent overall in 2018, as long as job growth remains solid and residential construction picks up.

With the Federal Reserve unwinding its balance sheet and continuing its plan to slowly raise short-term rates, Yun believes mortgage rates will gradually climb towards 4.50 percent by the end of 2018.

“An overwhelming majority of renters want to own a home in the future and believe it is part of their American Dream,” said Yun. “Assuming there are no changes to the tax code that hurt homeownership, the gradually expanding economy and continued job creation should set the stage for a more meaningful increase in home sales in 2018.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.nar.realtor. This and other news releases are posted in the newsroom in the “About NAR” tab.