January Marks Seventh Consecutive Month of Gains in Home Sale Prices
According to the latest RE/MAX National Housing Report, for the seventh consecutive month, home sales in January inched higher, rising 3.4 percent above levels seen last January. This data is based on a weighted average of 53 metropolitan areas surveyed. After an unexpected jump in sales at the end of 2011, January sales returned to a seasonal norm and were down on a monthly basis 19.3 percent from December. Perhaps due to falling foreclosure numbers, January 2012 marked the 19th consecutive month that inventory levels dropped. The number of homes for sale last month was 24.1 percent lower than the number seen in January 2011. In the 53 metro areas, home prices were down only 0.8 percent from just one year ago, building a trend of anticipated price stabilization.
“This positive start to the year will hopefully set the tone for a continuing housing recovery that’s drawing home buyers with low interest rates and low prices,” said Margaret Kelly, chief executive officer of RE/MAX LLC. “If sales continue ahead of last year’s pace and inventory does not increase significantly, we could start to see increasing home prices this year.”
Home sales in December defied the odds and ended the year with an unexpected jump. Coming back into line with the usual seasonal trend, January sales dropped lower than December by 19.3 percent, but for the seventh straight month, home sales remained higher than sales in the same month of the previous year, with a year-over-year increase in January of 3.4 percent. Of the 53 metro areas included in the January survey, 20 saw double-digit jumps from last year, and 36 experienced higher sales than January 2011, including: Albuquerque, N.M. +33.9 percent; Wilmington-Dover, Del. +33.2 percent; Atlanta, Ga. +26.3 percent; Indianapolis, Ind. +19.6 percent; Providence, R.I. +19.6 percent; Nashville, Tenn. +19.5 percent; Cleveland, OH +18.9 percent; and Chicago, Ill. +15.3 percent.
For January, the median sales price of sold homes (see chart below) in the 53 surveyed metros was $129,306. This price reflects a 3.4 percent drop from December, but is only 0.8 percent lower than the price seen in January 2011. January was the 17th month of year-to-year home price declines, although this is the smallest decline since October 2010. In last month’s survey, 15 metro areas showed price increases from January 2011, including: Miami, Fla. +23.8 percent; Orlando, Fla. +15.8 percent; Tampa, Fla. +15.6 percent; Phoenix, Ariz. +9.0 percent; Little Rock, Ark. +5.5 percent; and Detroit, Mich. +5.1 percent.
For the month of January, the average inventory of homes for sale in the 53 surveyed metro areas dropped 4.2 percent from December and also dropped 24.1 percent from January 2011. Month-to month inventories have now fallen for 19 consecutive months. Given the current rate of sales, and the size of the active inventory, the resulting month's supply is 7.3 months, half a month lower than the 7.8 month supply seen in December, but significantly lower than the 10.1 month supply reported in January 2011. Month's supply is 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.
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