Home Prices See 25.7 Percent Year-Over-Year Drop
Ending the year on a positive note, December home sales did not follow the seasonal trend but rose an unexpected 5.7 percent from sales in November according to a study conducted by RE/MAX. Sales were also up 1.1 percent from December 2010, the sixth consecutive month to show a year-over-year sales increase. Largely due to a lower volume of foreclosures, the number of homes for sale fell for the 18th straight month, and is now 25.7 percent lower than last year. Home prices remained nearly even with November prices, down just 0.35 percent and were down 3.5 percent from December 2010. Overall, 2011 was marked by home sales and prices that remained within a range, rising and falling in an equal number of months without showing a strong trend in either direction. “We’re pleasantly surprised to see the year end with such strong sales, and hope this trend will continue into the traditional spring selling season,” said Margaret Kelly, chief executive officer of RE/MAX LLC. “This December jump may be due to increased investor involvement and transactions that were scheduled to occur before the end of the year, but with prices at or very near the bottom and historically low interest rates, consumers are finding real value in this market.” While sales in November followed the usual seasonal trend, falling slightly, December sales surprised most analysts and rose higher. On a month-to-month basis, December sales rose 5.7 percent. For the sixth consecutive month, home sales were at a higher level than the same month in the previous year. Of the 53 metro areas included in the survey, 20 experienced higher sales than in December 2010, including: Providence, R.I. at +32.3 percent; Wilmington, Del. at +24.1 percent; Nashville, Tenn. at +20.5 percent; Miami, Fla. at +19.1 percent; Albuquerque, N.M. at +17 percent; and Chicago at +16.7 percent. In December, the Median Sales Price of sold homes was $179,587, which was nearly even with the November median price. On a month-to-month basis in 2011, prices rose in five months and declined in seven, not demonstrating a clear trend in either direction. December home prices were fractionally lower than what was seen in November, and 3.5 percent lower than December 2010. Year-to-year home prices have declined for 15 months straight. In the December survey of 53 metro areas, 20 showed price increases from November, while 11 experienced price increases over December last year, including: Miami, Fla. at +16.7 percent; Orlando, Fla. at +14 percent; Little Rock, Ark. at +6.9 percent; and Phoenix, Ariz. at +6.4 percent. For homes sold in December, the average "Days on Market" was 98, just one day higher than the average reported in November, and two days higher than the average seen in December 2010. Only two months in 2011 saw a "Days on Market" average below 90. July and September both reported 88, which represents the lowest average seen in the last 12 months. Days on Market is the number of days between first being listed in an MLS and when a sales contract is signed. The average inventory of homes for sale in the 53 metro areas surveyed in December dropped 11 percent from November and 25.7 percent from December of 2010. Inventory has fallen for 18 consecutive months. Given the current rate of sales, and the active inventory, the resulting Months Supply is the same as seen in November, 7.8 months, but significantly lower than the 10.2 month supply reported in December 2010. Month's Supply is defined as the number of months it would take to clear a market’s active inventory at the current rate of sales. A six-month supply is considered a balanced market between buyers and sellers.