Tight inventory pushes down home sales
Existing-home sales fall in September. Prices are up from a year ago, and inventory is down.
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The number of existing homes sold in September fell 1.7% from August, as tight credit and tight inventory held back sales. Sales were 11% above September 2011.
Inventory fell 3.3%, slightly below the six-month level considered healthy, with 20% fewer homes for sale than at the same time last year. That inventory is not evenly distributed nationwide. In California, for example, a shortage of homes for sale in lower price ranges is effectively pushing first-time buyers out of the market.
The tight inventory is also raising prices. The national median home price was $183,900 in September, up 11.3% from a year ago.
The National Association of Realtors, which released the data, put a positive spin on the results, a view shared by some independent analysts.
"While these numbers bounce around, there is no doubt that this is showing the housing market is improving," Joel Naroff, president of Naroff Economic Advisors, told Reuters.
"Despite occasional month-to-month setbacks, we're experiencing a genuine recovery," Lawrence Yun, the NAR's chief economist, said in a news release. "More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West."
The share of sales to first-time homebuyers and to investors was little changed from last year. First-time homebuyers accounted for 32% of the sales in September 2012, the same as a year ago. That’s a smaller percentage than we’d see in a normal market. The percentage of homes bought by investors was 18%, compared with 19% a year ago.
Distressed properties (foreclosures and short sales) made up 24% of the sales, down from 30% at the same time last year. Twenty-eight percent of sales were all cash, compared with 30% at the same time last year.
"The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless homebuilders robustly ramp up production," Yun said in the news release.
Looking at the results by region:
- West: Perhaps reflecting the shortage of inventory, sales were down 3.4% from the previous month and up 0.9% from a year ago. The median sale price was $246,300, up 18.4% from September 2011.
- South: Sales were up 0.5% from the previous month and 14.2% from a year ago. The median price was $163,600, up 13.1% from September 2011.
- Midwest: Sales were down 0.9% from the previous month and up 19.6% from a year ago. The median price was $145,200, up 7% from September 2011.
- Northeast: Sales were down 6.3% from the previous month and up 7.3% from a year ago. The median price was $238,700, up 4.1% from September 2011.