The National Association of Realtors on Thursday reported a 12.3% increase in sales of existing single-family homes, condo and co-ops to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November. The pace remained 2.9% below the 5.44 million rate of December 2009.
The sales gain was more than double the 4.7% increase to an annual pace of4.9 million expected by Wall Street. It was the fifth monthly gain in existing-home sales during the past six months.
The median price nationally fell 1% to $168,800 as sales of distressed properties rose to a 36% market share 33% in November and 32% in December 2009. Much of that decline was attributable to the multifamily housing sector.
"December was a good finish to 2010, when sales fluctuate more than normal,"said Lawrence Yun, the Realtors' chief economist. "The pattern over the past six months is clearly showing a recovery."
Single-family sales were up 11.8% to a seasonally adjusted annual rate of4.64 million from 4.15 million in November, still 2.5% below 4.76 million in December 2009. The median existing single-family price was $169,300, down 0.2% from a year earlier.
Existing condo and co-op sales surged 16.4% to a pace of 640,000 but remain 5.2% below the pace of December, 2009. The median existing condo price was $165,000 in December, down 7.4% from December 2009.
Regionally, the gains were across the board. The Northeast jumped 13% to an annual pace of 870,000, 5.4% below December 2009, with the median price down 1.4% from December 2009 to $237,300. The Midwest rose 11% to 1.11 million, 4.3% percent below a year prior, with the median price up 3.3% to $139,700.The South was up 10.1% to 1.97 million, 2.5% below December 2009, and the median price was flat at $148,400. The West gained 16.7% to 1.33 million, 1.5% below December 2009, with the median price down 5.6% to $204,000.
Total housing inventory fell 4.2% to 3.56 million existing homes available for sale, an 8.1-month supply, down from 9.5 months in November.
A separate study by the NAR indicated that first-time buyers purchased 33% of homes in December, up from 32% in November well below the 43% share these buyers comprised in December 2009. Investors accounted for 20% of the market, up from 19% in November and 15% in December 2009. The balance of sales were to repeat buyers. All-cash sales were at 29% in December, down from 31% in November but up from 22% a year earlier. All-cash sales have been remained at approximately 30% of the market for the past six months.
"The December pace is near the volume we¹re expecting for 2011, so the market is getting much closer to an adequate, sustainable level," said Yun."The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain."
The news cheered investors in the home building sector, with most of the public builders up against a downward trend in the major stock indices midmorning Thursday. Stephen East, home building analyst at Ticonderoga Securities, put out a note to investors stating, "We believe results, in part, were driven by the rising mortgage rate environment in the late fall of 2010, thereby drawing fence-sitters into the market. Obviously, this release is a positive for the equities. Further, this release eases some of our worries about the spring selling season. We do emphasize some, however. Nonetheless, we have to be encouraged given that we are definitely seeing a recovery on the 'existing' side."