November existing home sales decreased from October to a level below the same period a year ago. Existing home sales decreased 4.3% in November, and were down 1.2% from November 2012. The National Association of Realtors (NAR) reported November 2013 total existing home sales at a seasonally adjusted rate of 4.9 million units combined for single-family homes, townhomes, condominiums and co-ops, down from 5.12 million units in October.
All regions declined in November, ranging from an 8.5% decrease in the West to a 2.4% decrease in the South. Compared to the same period a year ago, existing sales in the Northeast and South increased 6.6% and 1.0% respectively. The Midwest was unchanged, while existing home sales the West decreased 10.1% from November 2012.
The November 2013 level of single-family existing sales fell 3.8% to a seasonally adjusted 4.32 million sales, and were down 0.9% from the same month a year ago. Seasonally adjusted condominium and co-op sales decreased 7.9% in November to a seasonally adjusted 580,000 units, and were down 3.3% from the same period a year ago.
The total housing inventory decreased 0.9% in November to 2.09 million existing homes. At the current sales rate, the November 2013 inventory represents a 5.1-month supply compared to a 4.9-month supply in October, and a 4.8-month supply of homes a year ago. NAR also reported that the November median time on market for all homes was 56 days, up from 54 days in October but down from 70 days during the same month a year ago. NAR reported that 35% of all homes sold in November were on the market less than a month, compared to 36% in October.
The share of distressed sales in November held steady for the third straight month at 14%, compared to 22% for the same period a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts.
The median sales price for existing homes of all types was $196,300 in November, down for the fifth straight month, but up 9.4% from the same month a year ago. Compared to a year ago, median sales prices increased in all four regions, ranging from 16.5% in the West to 5.7% in the Northeast. The median condominium/co-op price increased slightly to $197,400 in November from a downwardly revised $196,500 in October, and was up 10.0% from the same period a year ago.
In November 2013, all cash sales were 32% of transactions compared to 31% in October, and 30% in November 2012. For the third consecutive month, investors accounted for 19% of November 2013 home sales, the same level as a year ago. For the third consecutive month, first-time buyers accounted for 28% of November 2013 sales, unchanged from October, but down from 30% during the same month a year ago and well below the historical average of about 40%.
Based on the 0.6% drop in the October Pending Home Sales Index, it was expected that existing home sales would decline. In October, NAR chief economist Lawrence Yun asserted: “More new home construction is needed to help relieve the inventory pressure and moderate price gains.” That call was met by a string of excellent reports from the new residential construction sector including a 25.4% increase in October new home sales, a 4 point December increase in the NAHB/Wells Fargo Housing Market Index to 58 and a 22.7% increase in November total housing starts. A higher share of new home buyers are trade-up buyers and higher income households, and were financially better prepared to overcome the increase in mortgage rates earlier this year. After a continuing period of adjustment over the next few months, the long-term trend of increasing existing home sales will continue.