As the year 2017 came to its close, the real estate market had not shown any signs of a slow down with regards to sales pace. In fact, existing home sales for the month of November specifically had reached their strongest pace in nearly 11 years.
Total existing home sales are defined as transactions of single-family homes, townhomes, condos and co-ops. Sales of these properties jumped 5.6% for the month of November which brought sales 3.8% higher than the previous year and to their highest pace since December of 2006.
Lawrence Yun, NAR chief economist, stated that home sales in most of the country increased at a tremendous pace in November. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity (in November). The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”
While the sales pace increased, some other trends remained steady. The median price for all housing types had increased by 5.8% which marked the 69th consecutive month for year over year gains. Housing supply also had the same story with tight and limited number of available homes for sale at 9.7% lower than the year prior. Available housing was showing a 3.4 month supply versus last year’s at 4.0 months.
- The Northeast had an increase in existing home sales with a surge of 6.7% for the month of November. The median price had also increased over that of 2016 by 4%.
- The Midwest also rose significantly by 8.4% and was 6.8% higher than 2016. Median price had also shown an increase of 8.8% over 2016.
- The South’s home sales boosted 8.3% and were 4% higher than 2016. The median price was 4.8% higher than in 2016.
- The West was the only region showing a marginal decline with sales down by 2.3% yet still 2.5% higher than in 2016. The median price was also up and by 8.2% over November of 2016.
As we look forward into the year 2018, historically low rates may play their part on market conditions if they increase. “The anticipated rise in mortgage rates (in 2018) could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”