Sales of existing homes in January fell to their lowest level in 18 months, according to the National Association of Realtors’ data, declining 5.1 percent since December.
The report found that sales of all existing homes including single-family residences, condos, town homes and co-ops dropped to a seasonally adjusted annual rate of 4.62 million in January from 4.87 million the month before. Year-over-year, sales were also down 5.1 percent.
The NAR attributed the decline to a combination of factors: bad weather, a limited inventory of homes, higher prices and higher mortgage rates.
The report is nothing to be alarmed at, said Joe Rempson, president of the Charlotte Regional Realtor Association. He said that these statistics are really national numbers, although the Charlotte market is experiencing some of the same trends, but not to the same extreme.
“These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact,” said Lawrence Yun, chief economist at the NAR.
Housing inventory did show some improvement in January, with a total of 1.9 million homes available for sale, representing a 4.9 months’ supply, up from 4.6 months in December. The median existing home price for all types of housing was up 10.7 percent from the previous January, to $188,900. The median price for single-family homes in January was also $188,900, up 10.7 percent from a year ago.
Lake Norman has no shortage of inventory, according to Nadine Deason with Keller Williams Realty. “Homes priced in the $500,000 market have been moving better this winter than in the last five years, which is up from the trend last year where we saw homes in the $300,000 to $400,000 (range) selling much better.”
Sales of single-family homes fell 5.8 percent in January from the previous month to a seasonally adjusted annual rate of 4.05 million from the December rate of 4.30 million.
High prices and tight credit kept more first-time homebuyers out of the housing market. The NAR reports that first-time homebuyers accounted for 26 percent of all purchases, the lowest level since the association began tracking this segment of buyers in 2008. That figure is down from 27 percent in December and 30 percent in January 2013.
“We’ll see a levelling off (of prices) to a more normal market,” predicted Rempson.
Buyers paying all cash for properties constituted 33 percent of the market for the month, up from 32 percent in December and 28 percent in January 2013.
Foreclosures accounted for 11 percent of January sales and short sales were at 4 percent.
In the South, sales of existing single-family homes dropped 5.1 percent for the month from December and 0.6 percent year-over-year. The median sale price for a single-family home in the South was $175,600 in December, versus $163,300 in January. Year-over-year, the median sales price was up 9.6 percent.
Nancy Braun, owner and broker-in-charge at Showcase Realty, hopes that these numbers don’t indicate a temporary setback in the housing recovery. She notes that in addition to all the factors contributing to a decline in home sales, institutional investors have also slowed down on their acquisitions, perhaps because there are fewer foreclosures and short sales on the market.
“The investors are still here but they are being more selective on their acquisitions,” she added.
Home prices are not too high, Braun said, “but ‘the Deal’ we have all enjoyed in the recent past is not as prevalent.”
Braun believes that the market will improve as spring approaches because there is pent up demand.
“We frequently are managing multiple offers on our listings,” she said. “Home prices are higher and the interest rates are still good and the lenders are loosening their credit requirements.”