Like last year, 2015 home sales are starting the year at a slower pace. January home sales were 3.9 percent lower than sales in January 2014, according to the January RE/MAX National Housing Report. Last year, sales improved dramatically during the spring and summer months and three of the last four months of 2014 recorded higher sales than one year earlier. With a constrained inventory, the January Median Price rose by 11.2 percent over last January. And the inventory of homes for sale was 10.9 percent lower than one year ago. At the current rate of sales, the corresponding Months Supply of inventory fell slightly to 5.2 on a scale where 6.0 indicates a market balanced equally between buyers and sellers.
“One month certainly doesn’t make a trend,” says Dave Liniger, RE/MAX, LLC CEO, chairman and co-founder. “As we saw last year, home sales started rather slow, but rebounded during the prime selling months. In fact, 2014 ended with a respectable 4.9 million sales of existing homes, which we believe represents a sustainable rate of growth. So, we still need a few more months of data to tell how this market will perform in 2015.”
In the 53 metro areas surveyed for the January RE/MAX National Housing Report, the number of home sales decreased 32.1 percent from a robust December and were 3.9 percent below sales in January 2014. Typically, January closings are lower than those in December, and since 2008 the RE/MAX National Report has recorded an average 26.9 percent drop from December to January. Also likely impacting January’s lower closings is a continuing tight inventory and increasing prices. This January, a total of 13 metro areas reported higher sales on a year-over-year basis.
For all homes sold in January the Median Sales Price was $189,000. This was 3.3 percent lower than the median price in December, but 11.2 percent above the median price seen in January 2014. On a year-over-year basis, the Median Sales Price has now risen for 36 consecutive months. Price appreciation is the result of pressure from year-over-year inventory losses. Inventory has dropped by roughly 10 percent for the last three months. Among the 53 metro areas surveyed, 48 reported higher sales prices than one year ago.
The average Days on Market for all homes sold in January was 80, six days higher than the average in both December and January last year. Days on Market has been below 80 since March 2013, when the average was 85. An increase in Days on Market could be the result of higher quality inventory and a corresponding higher sales price. Days on Market is the number of days between when a home is first listed in an MLS and when a sales contract is signed.
The inventory of homes for sale in January was lower than both the previous month and the same month last year. Inventory was down 10.9 percent from January 2014 and was 5.2 percent lower than December’s inventory. For the last three months, year-over-year inventory has declined, but for 14 of the last 21 months inventory has improved sequentially. The Months Supply of inventory fell slightly from 5.7 to 5.2 in January. A supply of 6.0 is considered balanced.
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