August Shows 9.3% Increase in Sales of Existing Homes

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

In August, sales of existing homes increased 9.3%, reaching a seasonally adjusted yearly rate of 4.82 million from last year’s 4.41 million, according to the National Association of Realtors. This rate shows a 7.8% rise from July at 4.47 million.

This increase in August constitutes the sixth straight month of median home price increases on a year-over-year basis. In addition, the median price for all types of housing reached $187,400 for the month of August, increasing 9.5% from last year’s total. This phenomenon illustrates the first six consecutive monthly price increases on a year-over-year basis since December 2005 to May 2006, well before the housing market crisis.

Furthermore, this August surge shows the strongest increase since January 2006, in which the median price rose 10.2% from the previous January.

NAR chief economist Lawrence Yun attributes this to beneficial buying conditions.

According to Yun, the housing market is stabilizing, as illustrated by the trend of increased home sales and median prices. Yun continued to state that an increasing amount of buyers are utilizing the current affordability of houses and that housing market conditions are generally balanced throughout the country, neither privileging buyers or sellers. However, the West and Florida have been experiencing shortages and this has strained prices somewhat.

According to statistics, distressed homes composed 22% of August sales, with 12% being foreclosures and 10% being short sales. These figures represent a 2% decrease in July’s 24% and a 9% decrease from the August 2011 measurement of 31%. Foreclosed properties sold for an average of 19% below the standard market value in August, and short sales sold for 13% less, says the National Realtors Association.

Total inventory for housing rose 2.9% at the end of August, reaching 2.47 million existing homes available for sale. This illustrates a 6.1-month supply at the current sales rate, decreasing from a 6.4-month supply in July. Listed inventory dropped 18.2% from last year’s figures at an 8.2-month supply.

The median time on the market was 70 days for August, according to the NAR; this figure remains consistent with the 69 days in July but represents a 23.9% decline from the August 2011 amount of 92 days. In August, 32% of homes sold had been on the market for less than a month, with 19% on the market for a period of six months or more.

NAR President Moe Veissi believes that some buyers have been unfairly sidelined.

According to Veissi, total sales this year have risen 8-10% above 2011, though some buyers are finding mortgage availability to be the problem. Veissi additionally stated that if financially qualified borrowers had access to financing, the figures could be 10 to 15% higher, creating several hundreds of thousands of jobs over a year period due to the corresponding economic activity.