Existing Home Sales Still Looking Good in May
Foreclosures sold in May 2012 for an average discount of 19 percent below market value, and short sales were discounted 14 percent. Distressed homes accounted for 25 percent of existing home sales in May, accounting for a smaller share of total sales than in months past.
Existing home sales fell slightly in May due to diminishing inventories, but the year-over-year figures still indicate an improving market, according to the National Association of Realtors.
Total existing home sales fell 1.5 percent in May, keeping an annual pace of 4.55 million seasonally adjusted units, down from 4.62 in April but up 9.6 percent from May 2011. The May figure marks the 11th consecutive month of growth over the same month in 2011, said Lawrence Yun, NAR’s chief economist.
''The recovery is occurring despite excessively tight credit conditions and higher down-payment requirements, which are negating the impact of record-high affordability conditions,'' Yun said in a statement. ''The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand.''
Existing home sales include completed transactions for single-family homes, townhomes, condominiums and co-ops. The total housing inventory fell 0.4 percent at the end of May to 2.49 million existing homes available, and that figure is down 20.4 percent from a year ago.
Distressed homes, which include short sales and foreclosures, represented 25 percent of the selling market (10 percent were short sales, 15 percent were foreclosures), down from 28 percent in April and 31 percent year-over-year. Market analysts say that clearing the inventory of distressed homes brought on by the housing bust will be a leading factor in sustainable growth in the housing sector.