A seller's market is developing as home prices steadily rise and housing inventory drops compared with last year's levels, says the National Association of Realtors.
A seller's market is developing as home prices steadily rise and housing inventory drops compared with last year's levels, says the National Association of Realtors.
"Buyer traffic is continuing to pick up, while seller traffic is holding steady," said NAR chief economist Lawrence Yun. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."
Sales of existing homes increased 0.4 percent in January, consistent with last year's growth, while total housing inventory fell 4.9 percent at the end of January to 1.74 million existing homes for sale. That number of homes represents a 4.2-month supply at the current sales pace-that's the lowest housing supply since April 2005. This time last year, there was a 6.2-month supply. Raw unsold inventory is at its lowest point since December 1999, when there were 1.17 million homes on the market. Western states are most constrained by that limited inventory.
Yun says even with the expected seasonal rise in inventory come spring, multiple bidding will result in faster-than-normal price growth.
In January the average price of existing homes of all types was $173,600, up 12.3 percent from last January. This is the strongest year-to-year gain since November 2005.
Distressed homes accounted for only 23 percent of January sales, down 1 percent from December and 12 percent from January 2011.
