Carpe Diem

More signs that 2012 was the year of the housing recovery

Some highlights from today’s report on existing-home sales from the National Association of Realtors for December:

1. The median sales price for homes sold in December of $180,800 was an increase of 11.5% from December a year earlier, and was the largest year-over-year gain in median home price since a 12.9% increase in November 2005, more than seven years ago (see chart above).

2. For all of 2012, the median existing-home price ($176,600) increased 6.3% from 2011 ($166,100), and was the highest annual price gain since 12.4% increase in 2005.

3. December existing-home sales of 4.94 million units (at an annual rate) were 12.8% above sales a year earlier, the third consecutive month of a double-digit sales gain on a year-over-year basis.

4. The preliminary annual total for existing-home sales in 2012 was 4.65 million, an increase of 9.2% from 4.26 million homes in 2011, and the strongest annual increase in existing-home sales since 2004.

5. Total housing inventory at the end of December fell to 1.82 million existing homes available for sale, which represents a 4.4-months supply at the current sales pace, which is the lowest housing inventory level since May of 2005 when there was a 4.3 months supply of homes.

6. The median marketing time for homes sold in December was 73 days, a decrease of 26 days, and 26% below the average marketing time in December 2011 of 99 days.

7. (Update) On a year-over-year basis, both existing-home sales and the median sale price have registered double-digit gains for three consecutive months (October, November and December 2012), which hasn’t happened since at least the 1990s.

8. (Update) For the month of December, existing-home sales were the highest last year since 2006, six years ago.

Bottom Line: December existing-home sales continue the pattern that started early last year as the housing recovery took hold: more homes are selling faster at higher prices.

5 thoughts on “More signs that 2012 was the year of the housing recovery

  1. It is certainly a price recovery. You could even call it bubble re-inflation funded by the expansion of the federal reserve’s balance sheet from below $2.6 trillion to over $3 trillion in the last eleven months. Another factor in the housing price recovery is a steadily decreasing number of homes for sale. In the summer of 2010 the national housing inventory for sale was over 1.2 million units. In December 2013 the same inventory was well below 800,000 units. The banks are eating a lot of risk writing 30-year fixed loans at below 4% on this housing price recovery as well. I know the standard arguments they can lay this off, but bad debt is bad debt. Ultimately the American taxpayer is always on the hook for that bad debt through Fannie Mae, Freddie Mac, the FHA, and the Fed’s balance sheet.

    A final thought. The number of construction workers has been flat since 2010 at a level below 5.6 milllion workers. A real housing recovery would be supported by wage growth and job creation would it?

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