After 2 months of steady gains, existing home sales dropped in December. Sales fell in all four regions, but prices continued to climb, as they have for almost 7 years. The pace of sales was slower than it was in November, and slower than a year ago. Inventory was down from the previous month, but it remained higher than the previous December. The December 2018 Housing Market Recap contains mixed news, but the increase in inventory is a bright spot for buyers.
December existing home sales fell 6.4 percent from November, and were 10.3 percent lower than December 2017, according to the National Association of Realtors® (NAR) December Existing Home Sales Report, released January 22nd.
Inventory decreased from November to December, but increased year-over-year. At the current sales pace, the supply of unsold inventory was 3.7 months, up from 3.2 months a year ago.
Home prices continued to increase year-over-year. The median price of existing homes sold in December was $253,600, an increase of 2.9 percent from December 2017 ($246,500). We’ve now reached 82 consecutive months of year-over-year increases.
Days on the market (DOM) were up from November, moving from 42 to 46. A year ago, homes typically stayed on the market for 40 days, so the sales pace is slower year-over-year.
According to NAR chief economist Lawrence Yun, “Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
Regions: Sales down across the country. Year-over-year and month-over-month, sales fell. Comparing December to November, sales fell 11.2 percent in the Midwest, 6.8 percent in the Northeast, 5.4 percent in the South, and 1.9 percent in the West. The Northeast led year-over-year price increases at 8.2 percent, followed by the South at 2.5 percent and the West at 0.2 percent, while the Midwest was unchanged. Chico, CA took the top spot on the hottest metro areas list (measured by days on the market/listing views per property). The rest of the December Top 10 were Midland, TX, Odessa, TX, Columbus, OH, Fort Wayne, IN, San Francisco-Oakland-Hayward, CA, Sacramento-Roseville-Arden-Arcade CA, Colorado Springs, CO, Boston-Cambridge-Newton, MA-NH, and Stockton-Lodi, CA.
Inventory increases are positive for buyers. It’s slow going, and not spread evenly across price ranges, but the year-over-year increase in inventory is good news for buyers. Are you thinking of buying a home this year? Consider a broad search, including homes that might need renovation. A not-perfect home in a neighborhood you love may be the right home for you. A First Choice Loan Services Inc. Mortgage Loan Originator can explain your home loan options, including a purchase + renovation loan. Happy hunting!