Existing-home sales edged up in January, while a seller's market is developing and home prices continue to rise steadily above year-ago levels, according to the National Association of Realtors.
Total existing-home sales increased 0.4% to a seasonally adjusted annual rate of 4.92 million in January from a downwardly revised 4.90 million in December, and are 9.1% above the 4.51 million-unit pace in January 2012.
Existing-home sales are defined as completed transactions that include single-family homes, townhomes, condominiums or co-ops.
Lawrence Yun, NAR chief economist, said tight inventory is a major factor in the market. "Buyer traffic is continuing to pick up, while seller traffic is holding steady," he said. "In fact, buyer traffic is 40% above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."
Total housing inventory at the end of January fell 4.9% to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace, down from 4.5 months in December, and is the lowest housing supply since April 2005 when it was also 4.2 months.
The national median existing-home price for all housing types was $173,600 in January, up 12.3% from January 2012, which is the 11th consecutive month of year-over-year price increases; that last occurred from July 2005 to May 2006. The January gain is the strongest since November 2005 when it was 12.9% above a year earlier.
Distressed homes -- foreclosures and short sales -- accounted for 23% of January sales, down from 24% in December and 35% in January 2012. Fourteen percent of January sales were foreclosures and 9% were short sales. Foreclosures sold for an average discount of 20% below market value in January, while short sales were discounted 12%.