After a modest decline last month, existing-home sales bounced back in September to their highest annual pace of the year, according to the NATIONAL ASSOCIATION OF REALTORS®. All major regions except for the Midwest experienced gains in September.
The median existing-home price reached $209,700 in September, up 5.6% from September 2013. It was the 31st consecutive month of year-over-year price gains.
The median existing single-family home price was $210,300 in September, up 5.9% from September 2013.
The median existing condo price was $205,200 in September, which is 3.2% higher than a year ago.
The pace at which homes are selling increased 2.4%. That’s the fastest sales pace posted so far this year 2014, but it’s still 1.7% slower than last September.
The improved demand for buying seen since the spring has carried into the fall. “Low interest rates and price gains holding steady led to September’s healthy increase,” said NAR Chief Economist Lawrence Yun. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes. But buyers may also face a slight decline in choices because inventory generally falls heading into the winter.”
There were fewer homes on the market in September. Given the current sales pace, it would take 5.3 months to sell the 2.30 million existing homes currently listed for sale. Despite fewer homes for sale in September, unsold inventory is still 6.0% higher than a year ago, when there were 2.17 million existing homes available for sale.
About one-quarter of all the home sales in September were done by buyers paying cash. By comparison, about one-third of homebuyers paid cash last September. Individual investors, who account for many cash sales, purchased 14% of homes in September, up from 12% last month but below September 2013 (19%).
The percentage share of first-time buyers continues to underperform compared with the role first-time buyers have historically played, remaining at 29% for the third consecutive month. First-time buyers have represented less than 30% of all buyers in 17 of the past 18 months.
Fewer Distressed Home Sales
The number of homesellers who were distressed (in foreclosure or short-selling their homes for less than they owed on the mortgage) increased slightly in September to 10% from 8% in August. However, distressed sales were down overall from 14% a year ago. Seven percent of September sales were foreclosures and 3% were short sales.
Having fewer distressed sales benefits homeowners because foreclosures and short sales typically sell at a discount. That discount can then drive down the value of surrounding homes. Foreclosures sold for an average discount of 14% below market value in September (same as in August), while short sales were discounted 14% (10% in August).
“With foreclosures and short sales falling closer to average levels, appraisers will have fewer distressed sales in their list of comparables when determining home valuations,” said NAR President Steve Brown.
Time on Market
|Home type||Median # of days on market|
September 2014 Regional Existing-Home Sales
|Sales volume compared with Sept. 2013||2013 median price||
Median price compared with Sept. 2013
|Northeast||Up 1.5%||$249,800||Up 4.8%|
|Midwest||Down 5.6%||$165,100||Up 4.9%|
|South||Up 5.0%||$180,900||Up 5.1%|
|West||Up 7.1%||$294,200||Up 4.0%|