A shortage of for-sale inventory likely caused a slight month-to-month drop in existing-home sales in May, but both home sales and prices jumped compared to a year ago, according to the latest monthly report from the National Association of Realtors.
Sales of single-family homes, townhouses, condominiums and co-ops dipped 1.5 percent in May compared to April, to a seasonally adjusted annual rate of 4.55 million. Nonetheless, existing-home sales rose 9.6 percent year over year in May — the 11th straight month to see sales increase on an annual basis, said Lawrence Yun, NAR’s chief economist, in a statement.
"The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand. The normal seasonal upturn in inventory did not occur this spring," Yun said.
The national median existing-home price increased 7.9 percent on an annual basis in May, to $182,600 — the third straight month to see year-over-year price increases.
"The last time there were three back-to-back price increases from the same month a year earlier was from March to May of 2006," the report said.
Yun attributed some of the price gains to a smaller share of distressed sales. Distressed homes, typically sold at a discount, made up 25 percent of overall sales last month (15 percent were foreclosures and 10 percent were short sales), down from 31 percent in May 2011.
At a glance: Existing-home sales (May 2012):
| Seasonally adjusted annual rate | 4.55 million |
| % change from May 2011 | +9.6% |
| % change from April 2012 | -1.5% |
| National median price | $182,600 |
| % change from March 2011 | +7.9% |
| Unsold inventory (months’ supply) | 6.6 |
| Share of all-cash buyers | 28% |
| Share of investor buyers | 17% |
| Share of first-time buyers | 34% |
| Share of distressed sales | 25% |
Source: National Association of Realtors.
For-sale inventory of existing homes fell 20.4 percent year over year in May, to 2.49 million — a 6.6-month supply at the current sales pace. Inventory dipped 0.4 percent on a monthly basis.
All regions except the Northeast are experiencing widespread inventory shortages, particularly in the lower prices ranges, NAR said. The West and much of Florida have been especially affected.
"Realtors in Western states have been calling for an expedited process to get additional foreclosed properties onto the market because they have more buyers than available property," Yun said.
All-cash buyers, most of whom are investors, accounted for 28 percent of sales last month, down from 30 percent a year ago. Investors made up 17 percent of sales in May, down from 19 percent in May 2011. First-time buyers accounted for just over a third of transactions last month, 34 percent, down from 36 percent a year ago.
"These figures reflect a modest increase in traditional repeat home buyers in May," Yun said.
Regionally, the Midwest saw the biggest year-over-year increase in sales in May, 19.5 percent, to an annual level of 1.04 million. Sales in the region rose 1 percent on a monthly basis; every other region saw sales decline month to month. The Midwest saw a 6.4 percent jump in median sales price compared to a year ago, to $147,700.
Existing-home sales in the South dipped 0.6 percent month to month but rose 9.2 percent year over year in May, to 1.78 million. The region’s median price rose 7.8 percent on an annual basis in May, to $159,700.
The Northeast saw the smallest increase in its median sales price last month. The median rose 3.8 percent year over year to $250,700. The region’s sales jumped 7.3 percent on an annual basis, to 590,000. Sales slipped 4.8 percent from February.
In terms of sales, the West saw the smallest annual increase in May. Sales bumped up 3.6 percent year over year, to 1.14 million. On a monthly basis, sales fell 3.4 percent. Nonetheless, the West saw the biggest median price jump of all the regions, 13.4 percent, to $233,900.
"The sharp price increase in the West results largely from more sales at the upper end of the market," Yun said.
In a separate report released last week, the California Association of Realtors reported the state’s highest annual jump in existing, single-family home sales last month since May 2009 — a 21.5 percent increase to a seasonally adjusted annualized rate of 572,260. The state median home price rose on both a month-to-month and year-over-year basis for the third straight month in May to $312,110 — the highest median since September 2010, CAR said.
The trade group also noted a shortage of for-sale homes in the state with inventory at the same level as in December 2005 — a 3.5 months’ supply, down from 5.7 months in May 2011. Homes sold in a median 46.6 days, down from 52 days a year ago.
