Existing home sales fell in March, though industry insiders say
they remain optimistic about long-term trends in the housing
Sales of previously owned homes were down by 2.6 percent for the
month, to a seasonally adjusted annual rate of 4.48 million,
according to figures released today by the National Association of
Realtors. At the same time, that reflected a 5.2 percent increase
over the March 2011 level, the ninth consecutive month that sales
figures have shown an annual improvement.
That's encouraging for industry analysts, because annual rates
of change are considered more reliable indicators of the direction
the market is headed than month-to-month variations.
"The recovery is happening though not at a breakout pace," said
Lawrence Yun, NAR chief economist. "Existing-home sales are
moving up and down in a fairly narrow range that is well above the
level of activity during the first half of last year. With
job growth, low interest rates, bargain home prices and an
improving economy, the pent-up demand is coming to market and we
expect housing to be notably better this year."
Inventory down sharply
Yun said the downturn in March could be due in part to a
shrinking inventory homes for sale. Despite the widely publicized
glut of foreclosed properties, the NAR's estimate of homes
available for sale has been trending downward, shrinking by 21.8
percent over the past year to an inventory of 2.37 million units.
That represents a 6.3 months' supply at the current pace of
"We were expecting a seasonal increase in home listings, but a
lack of inventory has suddenly become an issue in several markets
with not enough homes for sale in relation to buyer interest," Yun
said. "Home sales could be held back because of supply
factors and not by demand - we're already seeing this in the
Western states and in South Florida."
Part of the reason that more foreclosures are not showing up in
the housing inventory is that many of those properties are still in
the process of foreclosure. Lenders are expected to begin picking
up the pace on foreclosures later this year, now that certain legal
issues have been cleared out of the way through the recent
settlement between the nation's five largest mortgage lenders and
the federal and state governments over accusations of inappropriate
The median sales price for homes of all types - including single
family, condominiums, co-ops and townshouses - was $163,800 in
March, representing a 2.5 percent increase over March 2011.
Distressed properties such as foreclosures and short sales made up
29 percent of all home sales during the month. Foreclosures sold at
an average 19 percent discount compared to conventional sales and
short sales were discounted by 16 percent.