Real Estate Recovery Continues

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MORTGAGE EXPERT
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Data supporting a real estate recovery continue to pour in, with sand states leading the national market. The laws of supply and demand are tipping the scale in favor of sellers.

Last month’s national median existing home price was $173,000, according to the National Association of Realtors.

The median price was up 12.3 percent from a year earlier. It was the 11th consecutive year-over-year increase — something NAR said hasn’t happened since the period July 2005 to May 2006.

Dr. Alex Villacorta, director of research and analytics at Clear Capital, weighed in on January’s positive numbers.

“Home price trends in January remained solid overall, considering we are in the middle of the toughest real estate season of the year,” Villacorta said. “We saw quarterly trends continue to soften, while yearly gains strengthened, suggesting the budding recovery is not immune to the slower winter season.

“What remains to be seen is if home prices will continue to rise, or remain stable through the winter.”

The LPS Home Price Index was up 0.1 percent in December from a month earlier. The index was 5.8 percent better than in December 2011.

Nevada’s 1.3 percent improvement from November was the best of any state in the LPS report. The Silver State’s performance was buoyed by the 1.6 percent increase in Las Vegas — the best of any metropolitan area.

Florida’s 1.0 percent increase followed, according to LPS. Helping Florida was that eight of the 10 top-performing metropolitan areas were located in the Sunshine State.

Next was 0.6 percent in New York and 0.4 percent in both California and Arizona. The worst decline in the LPS report was in Alaska: 0.8 percent.

Since home prices peaked in June 2006, U.S. values are down 22 percent, according to LPS.

December’s home prices edged up 0.4 percent from a month earlier based on data from CoreLogic. Compared to a year earlier, prices were up 8.3 percent — the 10th consecutive increase and the best year-over-year improvement since May 2006.

NAR reported that January’s median time on the market was 71 days, faster than 73 days the prior month. Sales have also sped up from a year earlier, when it took 99 days.

All-cash sales accounted for 28 percent of January’s sales.

“The typical home is selling nearly four weeks faster than it did a year ago,” NAR President Gary Thomas said in the report.

Total existing home sales came in at a seasonally adjusted annual rate of 4.92 million during January, NAR reported. Sales include single-family homes, townhomes, condominiums and co-ops.

The pace was up less than 1 percent from a month prior and 9 percent better than a year prior.

A tight inventory is driving the market, according to NAR Chief Economist Lawrence Yun. Buyer traffic is up 40 percent from a year ago. But January’s total housing inventory of 1.74 million existing homes available for sale has fallen to a 4.2 month supply — the lowest level since April 2005.

Data from the Census Bureau indicate that January’s housing starts were a seasonally adjusted annual rate of 890,000. Activity slowed 8.5 percent from the previous month but was up nearly a quarter from the same month in the previous year.

“Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multifamily units,” noted National Association of Home Builders Chief Economist David Crowe said in a written statement. “Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector.”

The annual rate for building permits was 925,000 in January, the Census Bureau data indicated, That was 1.8 percent more than December’s revised total and up more than a third from a year earlier. Last month’s single-family permit rate was 584,000 units.

NAR reported that its Pending Home Sales Index was down 4 percent between November and December. The index, however, was up 7 percent from the final month of 2011.

“The supply limitation appears to be the main factor holding back contract signings in the past month,” Yun said in the report. “Still, contract activity has risen for 20 straight months on a year-over-year basis … Buyer interest remains solid, as evidenced by a separate Realtor survey which shows that buyer foot traffic is easily outpacing seller traffic.”

The Census Bureau reported last month that single-family home sales were a seasonally adjusted annual rate of 369,000 during December, down 7 percent from the previous month’s revised rate. Monthly sales, however, were 9 percent higher than in December 2011. Full-year home sales improved 20 percent from 2011.

CoreLogic said annualized total sales were 3,911,000 units in December, off from the prior month’s 3,923.000. The latest total included 307,000 new sales, 2,601,000 existing sales, 562,000 REO sales and 412,000 short sales. Distressed sales accounted for a quarter of December’s activity.

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Mortgage Daily Staff

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