Buyers Act Fast: Existing Homes Are Selling Quickly
Homes across the nation are selling at a breakneck pace—reaching levels not seen since the height of the housing boom more than a decade ago.
Sales of existing homes (which have previously been lived in) rose 5.6% last from October to November, according to the most recent National Association of Realtors® report. They were also up 3.8% year-over-year to reach a high of about 5.81 million sales. That's the fastest clip at which they've sold since December 2006.
(Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuations.)
Co-op and condo sales surged the most, vaulting 14.3% month-over-month and jumping 7.5% annually. Meanwhile, sales of single-family abodes, those classic residences that often come with a yard out back (if not a white picket fence), rose 4.5% from October and 3.2% from November 2016.
"In general, home sales are up because of the strong economy, low unemployment," says realtor.com Senior Economist Joseph Kirchner. "There may have been a bump in sales because home buyers are anticipating an increase in mortgage interest rates and they wanted to act before the rates went up.”
But given the high number of sales, and the fewest number of homes on the market since the 1980s, he predicts "we're in a for a bumpy ride," as the high sales growth simply is not sustainable.
The uncertainty surrounding how the Republican tax plan will affect both buyers and sellers also may throw a wrench into the housing market—though it's also not clear in what way.
"They may either hold off or speed up," he says of prospective home buyers.
Median home prices to rose to hit $248,000 in November. That's up 0.8% from the previous month and 5.8% over the previous year. It's great news for sellers and not-so-good news for buyers.
The most existing homes sold in November, about 41.5%, were in the $100,000 to $250,000 price bracket. An additional 34% were in the $250,000 to $500,000 range.
Only 10.8% were under $100,000. The rest, about 13.7%, were over $500,000.
Existing homes are still significantly cheaper than newly constructed abodes—about 27.2% more so. That's because land and labor costs are so high, so new construction is skewed toward luxury and custom homes.
Newly constructed homes cost a median at $312,800 in October, according to the most recent U.S. Census Bureau and U.S. Department of Housing and Urban Development data.
Nationally, sales of existing homes rose the most in the more-affordable Midwest, where many metros are experiencing resurgences. They jumped 8.9% from October and were up 7.2% over November 2016. The median home price was $197,500.
The region was followed by the South, with the number of sales up 7.3% month-over-month and 4.1% year-over-year. Some of that rush may be from buyers whose homes were damaged in Hurricanes Harvey or Irma and chose to buy new properties. The median home price was $220,200 in the region.
In the Northeast, sales were up 6.5% from the previous month, but were down 1.5% annually. The median price was $272,100. And in the West, where prices were the highest at $376,200, sales fell 6.3% from October. They were flat from a year ago.
"Move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month," NAR's Chief Economist Lawrence Yun said in a statement. "The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”