Home sales inch up in January as inventory shrinks
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By Steve Goldstein,
MarketWatch
WASHINGTON (MarketWatch) — Sales of existing home sales nudged
up 0.4% in January, according to a report released Thursday showing the housing
recovery has steadied as real-estate agents lament a more-than-decade low of
supply.
The National Association of Realtors said sales increased to a seasonally
adjusted annual rate of 4.92 million in January from 4.90 million in December.
That was just slightly ahead of the 4.90 million expected in a
MarketWatch-compiled economist poll. December’s data was downwardly revised from 4.94 million, and the NAR also made monthly (but not annual) changes to the last three years’ data.
A 'For Sale' sign is posted in front of a house on
Nov. 28, 2012. in Hollywood, Fla.
The NAR says 4.66 million homes were sold last year, up from an initial
estimate of 4.65 million and the best performance since 2007. 
Low mortgage rates and an improving jobs picture have helped the housing market begin to bounce back from the bursting of the bubble, though sales still remain far below pre-recession levels.
Only in the West did sales fall in January, dropping 5.7%. Lawrence Yun, the chief economist of NAR, blamed that on a lack of available inventory.
Nationally, inventories fell 4.9%, or 25% year-on-year, to 1.74 million, which is the lowest since December 1999. At the current sales pace, the months supply was 4.2, the lowest since April 2005.
Yun said publicly traded builders including Lennar (NYSE:LEN) , Toll Brothers (NYSE:TOL) and KB Homes (NYSE:KBH) are building due to easy access to funding, but small-time builders are being frozen out, as community banks aren’t lending, which he attributes to tougher regulations such as Dodd-Frank.
He also said that the so-called shadow inventory of homes — referring to homes either on bank books or about to be foreclosed — aren’t going to change the picture, because that is declining. CoreLogic estimated that the shadow inventory dropped 12% year-on-year to 2.3 million in October.
ECONOMY AND
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Euro
zone shrinks while U.S. housing grows
Data released this week show the continued trouble in Europe and the generally positive signs coming out of U.S. housing. See the charts.
• Washington events for Feb. 25 - March 1
• Bernanke may push back against hawkish talk
• Sequester will delay flights, LaHood warns
• SEC touts first post-crisis issuance rise
• Bubble, loss concerns played down by Fed
Data released this week show the continued trouble in Europe and the generally positive signs coming out of U.S. housing. See the charts.
• Washington events for Feb. 25 - March 1
• Bernanke may push back against hawkish talk
• Sequester will delay flights, LaHood warns
• SEC touts first post-crisis issuance rise
• Bubble, loss concerns played down by Fed
“We’ve transitioned into a seller’s market in much of the country,” he said. Prices remained on the upswing. Compared to January 2012, the median sales price rose 12.9% to $173,600, marking the 11th straight month of year-on-year gains.
Yun acknowledged that more upper-end homes are being sold, lifting the median price, but every segment besides those under $100,000 — which is roughly a quarter of the market — saw price gains.
Repeat sales price indexes like the Case-Shiller have shown smaller price gains.
Distressed sales accounted for 23% of all transactions, down from 24% in December and 35% in January 2012.
All-cash transactions represented 28% of sales, down from 29%, and first-time buyers accounted for 30% of all buyers, unchanged vs December but below historical levels of around 40%.
Other housing reports released this week showed some slightly negative news.
The oft-volatile housing starts report showed a slump in January as apartment building slowed, and a building sentiment indicator fell in February for the first time in 10 months. Read more on housing starts..
Thursday saw a flood of economic reports. Jobless claims rose, a Philadelphia-area manufacturing survey was negative, and consumer prices didn’t budge. See MarketWatch's Economy & Politics page.
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