In a news release on December 20th the National Association of Realtors shows that market conditions continued to improve in November, with lowering inventory and rising prices. The article states that total existing home sales including single family homes, town-homes, condos and co-ops rose 5.9% in November which reflects a 14.5% increase from November of 2011. Lawrence Yun, NAR Chief Economist, said “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation”. Let’s take a more in depth look at the breakdown of the numbers.
One of the big factors contributing to the market recovery is the lowered inventory of distressed homes on the market. Foreclosures and short sales only made up 22% of the sales in November, down from 24% the previous month and 29% in November of 2011. These properties were only showing average discounts of 16-20% from market value, a sign of increased demand. Yun said “The market share of distressed property sales will fall into the teens next year based on a diminishing number of seriously delinquent mortgages”. The current low interest rates and availability of programs to assist home owners will continue to contribute to the reduction of this type of home inventory.
Total housing inventory at the end of November represented a 4.8 month supply with sales at their current pace. This is the lowest supply the market has witnessed since September of 2005. We are also seeing time on the market decrease both nationally and locally with the national stats showing a 28.6% decrease from the same month last year.
As demand increases prices are expected to continue their steady rise. The national median price for existing homes was $180,600 last month. This is not only the ninth consecutive month of year over year gains but also represents a 10.1% increase in price from last November. The last time we were able to see price increases sustained for this many months in a row was from September of 2005 through May of 2006.
We believe that this positive trend will continue through the end of the year and in to 2013. Next week we will take a look at how 2012 finished out for the Smoky Mountain real estate market. The following months of January and February are traditionally a flurry of activity for our area when a large number of buyers visit to view homes. If you have been thinking of coming to explore the market give us a call or email, we are happy to schedule an appointment. If you have a home to sale, now may be the time to ask for a market analysis, you may find that now is the time to list.
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