Nationally US property sales increased in November but fell in some regions

The United States real estate market has had an outstanding end to 2016 with existing home sales rising in November for the third month in a row, data from agents shows.

A big surge in the Northeast and a smaller gain in the South pushed existing home sales up by 0.7% month on month and 15.4% year on year, the highest annual pace since February 2007. But month on month they have fallen in some western regions.

The data from the National Association of Realtors (NAR) also shows that the median existing home price is up 6.8% compared to a year ago at $234,900 and the 57th month in a row of house price rises.

‘The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,’ said Lawrence Yun, NAR chief economist.

At the same time the number of homes coming onto the market is falling with total housing inventory at the end of November down 8% and is now 9.3% lower than a year ago having fallen for 18 months in a row. It means that unsold inventory is at a four month supply at the current sales pace, which is down from 4.3 months in October.

‘Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country,’ Yun explained.

Sales to first time buyers are steady at 32% in November, down slightly from 33% in October and up from the 30% recorded a year ago. Overall the annual share is 35%, the highest since 2013.

However, Yun warned that first time buyers in higher priced cities will be most affected by rising prices and mortgage rates next year and will likely have to stretch their budget or make compromises on home size, price or location.

The research report also shows that properties typically stayed on the market for 43 days in November, up from 41 days in October but down considerably from a year ago when it was 54 days.

Short sales were on the market the longest at a median of 110 days in November, while foreclosures sold in 55 days and non-distressed homes took 41 days while 42% of homes sold in November were on the market for less than a month.

All-cash sales were 21% of transactions in November, down from 22% in October and 27% a year ago. Individual investors, who account for many cash sales, purchased 12% of homes in November, down from 13% in October and 16% a year ago. Some 58% of investors paid in cash in November, which matches the lowest share since August 2009.

Distressed sales, foreclosures and short sales, increased by 6% in November, up from 5% in October but down from 9% a year ago. Overall 4% of November sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 17% below market value in November compared to 18% in October, while short sales were discounted 16%, unchanged month on month.

A breakdown of the figures show that single family home sales fell 0.4% in November but are still 16.2% above year ago and the median existing single family home price was $236,500 in November, up 6.8% year on year.

Existing condominium and co-op sales jumped 10% in November and are now 10% above a year ago with a median price of $222,600 in November which is 5.8% percent above a year ago.

On a regional basis existing home sales in the Northeast increased 8% in November and are now 15.7% above a year ago. The median price in the Northeast was $263,000, which is 3.3% above November 2015.

Existing home sales in the South increased 1.4% and are now 11.6% above November 2015. The median price in the South was $206,900, up 9.2% from a year ago.

But prices sales have fallen in some regions. In the Midwest, existing home sales decreased 2.2% but are still 18.8% above a year ago and the median price was $180,300, up 6.5% from a year ago. And in the West sales fell 1.6% but are still 19% higher than a year ago. The median price in the West was $345,400, up 8.5% from November 2015.