Existing homes were up again in January–the fifth increase in the past six months. The National Association of Realtors (NAR) reported a 2.7% increase to a seasonally adjusted annual rate (SAAR) of 5.36 million units in January 2011, building on the 6.1% increase in November and 11.1% increase in December. Overall, from the low of 3.84 million units in July, existing home sales have gained 39.6% in the six months to January 2011.
Sales of single-family home were up 2.4% to 4.69 million units from a revised 4.58 million units in December, while condominium and coop sales rose 4.7% to 670,000 units from 640,000 units in December. From their low in July 2010, single-family home sales have grown 39.1%, while condominium and coop sales are up 42.5%.
Across the regions, sales growth was mixed, with the West increasing 7.9% to 1.37 million units, the South up 3.6% to 2.02 million units and the Midwest rising 1.8% to 1.14 million units, but the Northeast was down 4.6% to 830,000 units.
The housing inventory continued to fall, down 5.1% to 3.38 million existing homes for sale. At the current sales level, this represents a 7.6-month supply, down from an 8.2-month supply in December.
The parallel NAR practitioner survey indicates that of the existing home sales in December, 23% were to investors, 29% were to first time buyers and the remaining 48% were to repeat buyers. Investors’ share of home sales has been rising steadily in recent months, up from 20% in December and 19% in November 2010. Distressed home sales edged up to a 37% market share in January, from 36% in December and 33% in November. Associated with the increasing presence of investors in the market, there has been a steady increase in all cash transactions, which rose to 32% of home sales in January, up from 29% in December and 26% in January 2010. All cash purchases are primarily of distressed homes sold at deep discounts. It appears that investors are taking advantage of their cashed up position in the current market to purchase undervalued distressed homes.