As the third quarter closed, home resales showed considerable momentum nationwide.
The National Association of REALTORS® reports Existing Home Sales at 4.75 million units in September 2012 on a seasonally-adjusted, annualized basis, an 11 percent increase from one year ago.
An “existing home” is a home that’s been previously occupied; a resale.
The reading marks the second-highest tally of the year — second only to August 2012 when 4.83 million homes were sold on a seasonally-adjusted, annualized basis. The real estate trade association reports that there are now just 2.32 million previously-occupied homes for sale nationwide.
It’s the thinnest national home supply since March 2005 and, at today’s sales pace, all 2.32 million homes would sell in 5.9 months.
A 6.0-month home supply is thought to represent a market in balance. September’s home supply, therefore, suggests a market which favors sellers. Buyers in many U.S. markets may have noticed this shift. Multiple-offer situations are increasingly common and “right-priced” homes are selling quickly.
The median Time on Market is down 31 percent from last year to 70 days nationwide.
Meanwhile, for purchasers of foreclosures and short sales, September Existing Home Sales report included interesting data on the relative value of buying “distressed” property :
- Foreclosures sold at an average discount of 21% to market value last month
- Short sales sold at an average discount of 13% to market value last month
And, although distressed homes remain a large part of the U.S. housing market, their relative size is shrinking.
In September, foreclosures and short sales accounted for roughly 1 in 4 home sales. Earlier this year, that figure was 1 in 3.
For today’s Chicago home buyer, September’s Existing Home Sales report may be a “buy signal”. With home supplies down and demand for homes rising, home prices are poised to increase through the last three months of 2012 and into the start 2013.