Existing Home Sales Down in December But Overall Year Was Best Since 2006

Existing home sales decreased by 3.6% in December for a seasonally adjusted rated of 5.57 million.  The amount is an 1.1% in 2017.  This amount has eclipsed the 2016 figure (5.45 million) and is  the highest since amount of existing-home sales since 2006 (6.48 million).  Total existing home sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops.  The report was presented by the National Association for Realtors (NAR) also indicated that sales price and the amount of inventory affected sales in December.

Lawrence Yun chief economist for the NAR states "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.  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.”

The median sales price increased in December to $246,800 which is an increase of 5% from the same time last year ($233,300).  With respect to inventory, we saw a drop of  11.4% to 1.48 million existing homes available for sale.   Inventory is now 10.3 percent lower year over year (1.65 million) and has decreased for 31 consecutive months

On the mortgage front, interest rates have increased to 3.95 percent on fixed rates this month which is an increase from November and third straight month in increases to interest rates.  Mr. Yun believes that increases in interest rates along with high sales prices will make it harder to for first time home buyers to enter the market in 2018.  "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. However, if inventory conditions fail to improve, higher mortgage rates and prices will further eat into affordability and prevent many renters from becoming homeowners" said Yun.

Of note in the Northeast, existing-home sales decreased 7.5% to an annual rate of 740,000, and are now 2.6% below 2016 figures. The median price in the Northeast was $261,400.  That is a 3.0% from last year as well.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/existing-home-sales-december-overall-year-best-since-2006/