By: Dr. Mike Campbell
There was mixed news last month for America’s homeowners. On the positive side, sales of existing housing stock within the US rose by 2.7% in January which implies that buyers are returning to the market. According to the National Association of Realtors (NAR), the January sales level equates to an annualised rate of 5.36 million sales. The improvement in the figures came despite an unusually cold spell – but then the figures relate to sale of the existing housing stock rather than new builds.
On the negative side of the balance sheet, more than a third of the sales in January were of homes that had been reposed by lenders because the owners were unable to meet the payment schedule. Of these January sales, almost a third were straight cash transactions and did not therefore involve loans.
Another Look at the US Housing Market
In Miami and Las Vegas, the figure for cash sales rose to half of all transactions. The other worrying thing, from a home owner’s perspective, is that the value of homes has fallen by a further 3.7%, taking the price down to levels last seen nine years ago. The average house price in the US has now fallen to $158 800; a level last seen in April 2002.
Slightly more encouraging is the fact that the January rise is also the first year-on-year rise that the industry has seen in seven months. The January 2011 data represents a 5.3% increase on the level of house sales seen in January 2010. First time buyers represented 29% of sales, but traditionally, this group would be expected to represent nearer to 40% of the total.