By Peter Ricci
Existing-home sales continued their positive readings in August, rising 7.8 percent from July and 9.3 percent from August 2011 as housing inventory continued to stabilize, according to the National Association of Realtors (NAR).
National median existing-home price was similarly optimistic, rising 9.5 percent from last year to $187,400, which is the strongest median price increase since January 2006 and the sixth straight month of increases (such a streak has not occurred since 2006).
Existing-Home Sales Statistics – All Positives
Along with existing-home sales statistics and median prices, NAR also reported on a number of other similarly positive developments for the existing-home market:
- Distressed property sales continued to make up fewer and fewer of existing-home sales; in August, 22 percent of sales were for distressed homes (12 percent foreclosures, 10 percent short sales), down from 24 percent in July and 31 percent in August 2011. The smaller the share of distressed properties, the healthier the real estate market.
- Median time on market was 70 days in August, consistent with July's 69 days but down by 23.9 percent from the 92 days in August 2011.
- On a regional basis, existing-home sales were up in the Midwest by 7.7 percent monthly and 17.9 percent yearly, with median price rising by 7.8 percent; in the South, sales rose monthly and yearly by respective amounts of 7.3 and 11.1 percent, with a yearly price increase of 6.5 percent.
Active Housing Inventory
Of course, as analysts continue to point out, the most important stat in NAR's exhaustive report is active housing inventory, and how it compares with past housing markets. For August, total housing inventory rose 2.9 percent to 2.47 million, which is a 6.1-month supply and an 18.2 percent reduction from the 8.2-month supply of a year ago. Housing inventory is now around the same level as that of August 2004.
We cover housing inventory pretty regularly (obsessively, even!), but for good reason – inventory levels were really out of whack when the market slowed down in 2007-08, and we were left with big pockets of excess inventory in many of the nation's most active housing markets. Now, though, a declining housing inventory means housing fundamentals are getting back to normal, which definitely a good thing for housing.