Existing home sales, as reported by the National Association of Realtors (NAR), decreased 2.8% in December, but ended 2016 as the best year for existing sales since 2006. December sales were up a slight 0.7% from the same month a year ago. Total 2016 existing home sales reached 5.45 million, exceeding the 5.25 million in 2015. Total existing home sales include single-family homes, townhomes, condominiums and co-ops.
December existing sales were unchanged in the South, but declined 3.8% in the Midwest, 4.8% in the West and 6.2% in the West. Year-over-year, existing sales increased 2.7% in the Northeast, 2.4% in the Midwest and 0.4% in the South, while declining 1.6% in the West.
Total housing inventory decreased dramatically by 10.8% in December, and is at the lowest level since the series was launched in 1999. Inventory has fallen for 19 straight months. At the current sales rate, the December unsold inventory represents a 3.6-month supply, compared to a 3.9-month supply in November. Homes stayed on the market for 52 days in December, an increase from 43 days in November, but down from 58 days last December. Some 37% of homes sold in December were on the market for less than a month.
The December all-cash sales share was unchanged from November at 21%, but was down from 24% during the same month a year ago. Individual investors purchased a 15% share in December, up from 12% in November and unchanged from the same month a year ago. Some 59% of investors paid cash in December. The first-time home buyer share was 32% in December, unchanged from November and last December. Distressed sales, comprised of foreclosures and short sales, increased to 7% in December, which was down from 8% in the same month a year ago.
The December median sales price of $232,200 was 4.0% above the same month a year ago, and represents the 58th consecutive month of year-over-year increases. The median condominium/co-op price of $221,600 and is up 5.5% from the same month a year ago.
The December decline in existing sales was consistent with the November drop in pending sales to the lowest level in a year. NAR cited “another year of insufficient home construction,” and urged action to “address the regulatory and cost burdens preventing builders from ramping up production.” However, builders continue to address the low inventory of homes as builder sentiment held firm in January. Both jobs and incomes are growing, suggesting an improving market for new single-family construction.