Unexpected Jump in Home Sales Mark End of 2011

DENVER, Jan. 16, 2012 /PRNewswire/ -- Ending the year on a positive note, December home sales did not follow the seasonal trend but rose an unexpected 5.7% from sales in November.  Sales were also up 1.1% from December 2010, the 6th consecutive month to show a year-over-year sales increase.  Largely due to a lower volume of foreclosures, the number of homes for sale fell for the 18th straight month, and is now 25.7% lower than last year.  Home prices remained nearly even with November prices, down just 0.35% and were down 3.5% from December 2010.   Overall, 2011 was marked by home sales and prices that remained within a range, rising and falling in an equal number of months without showing a strong trend in either direction.

"We're pleasantly surprised to see the year end with such strong sales, and hope this trend will continue into the traditional spring selling season," said Margaret Kelly, CEO of RE/MAX, LLC.  "This December jump may be due to increased investor involvement and transactions that were scheduled to occur before the end of the year, but with prices at or very near the bottom and historically low interest rates, consumers are finding real value in this market." 

Transactions – Year-Over-Year Change

While sales in November followed the usual seasonal trend, falling slightly, December sales surprised most analysts and rose higher. On a month-to-month basis, December sales rose 5.7%.  For the 6th consecutive month home sales were at a higher level than the same month in the previous year. Of the 53 metro areas included in the survey, 20 experienced higher sales than in December 2010, including: Providence, RI +32.3%,  Wilmington, DE +24.1%,  Nashville, TN +20.5%,  Miami, FL +19.1%,  Albuquerque, NM +17.0% and Chicago, IL +16.7%

Median Sales Price

In December, the Median Sales Price of sold homes was $179,587, which was nearly even with the November median price.  On a month-to-month basis in 2011, prices rose in five months and declined in seven, not demonstrating a clear trend in either direction.  December home prices were fractionally lower than what was seen in November, and 3.5% lower than December 2010.  Year-to-year home prices have declined for 15 months straight.  In the December survey of 53 metro areas, 20 showed price increases from November, while  11 experienced price increases over December last year, including:  Miami, FL +16.7%, Orlando, FL +14.0%, Little Rock, AR +6.9% and Phoenix, AZ +6.4%. 

Days on Market – Average of 54 Metro Areas

For homes sold in December, the average Days on Market was 98, just 1 day higher than the average reported in November, and  2 days higher than the average seen in December 2010.  Only two months in 2011 saw a Days on Market average below 90.  July and September both reported 88, which represents the lowest average seen in the last 12 months.  Days on Market is the number of days between first being listed in an MLS and when a sales contract is signed. 

Months Supply of Inventory – Average of 54 Metro Areas

The average inventory of homes for sale in the 53 metro areas surveyed in December dropped 11.0% from November and 25.7% from December last year.  Inventory has fallen for 18 consecutive months.  Given the current rate of sales, and the active inventory, the resulting Months Supply is the same as seen in November, 7.8 months, but significantly lower than the 10.2 month supply reported in December 2010.  Months Supply is the number of months it would take to clear a market's active inventory at the current rate of sales.  A six-month supply is considered a balanced market between buyers and sellers.

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Description

The RE/MAX National Housing Report is distributed each month on or about the 15^th. The first Report was distributed in August 2008. The Report is based on MLS data in approximately 54 metropolitan areas, includes all residential property types, and is not annualized. For maximum representation, many of the largest metro areas in the country are represented, and an attempt is made to include at least one metro from each state. Metro area definitions include the specific counties established by the U.S. Government's Office of Management and Budget, with some exceptions.

Definitions

Transactions are the total number of closed residential transactions during the given month.  Month's Supply of Inventory is the total number of residential properties listed for sale at the end of the month (active inventory) divided by the number of sales contracts signed (pended) during the month.  Where "pended" data is unavailable, this calculation is made using closed transactions.  Days on Market is the number of days that pass from the time a property is listed until the property goes under contract for all residential properties sold during the month. Median Sales Price is the median price of all residential properties sold during the month.

MLS data is provided by contracted data aggregators, RE/MAX brokerages and regional offices.  While MLS data is believed to be accurate, it cannot be guaranteed.  MLS data is constantly being updated, making any analysis a snapshot at a particular time.  Every month the RE/MAX National Housing Report re-calculates the previous period's data to ensure accuracy over time.  All raw data remains the intellectual property of each local MLS organization.

SOURCE RE/MAX LLC