Existing home sales declined 1% in December, sliding to a seasonally adjusted annualized rate of more than 4.9 million total units. Nonetheless, data from The National Association of Realtors (NAR) indicate sales remain on an upward trend. The average monthly pace recorded during November and December was at its highest level in three years, while sales increased nearly 13% on a year-over-year basis in December. In addition, sales have risen at a double-digit pace in each of the last three months. For the year as a whole, the preliminary estimate increased 9.2% to 4.65 million, marking the highest annual sales volume since 2007.
Sales of existing single-family homes fell 1.4% compared to November 2012, dropping to a seasonally adjusted annual rate of 4.35 million units. Despite the slight decline last month, single-family existing home sales are up nearly 12% on a year-over-year basis and for the calendar year as a whole sales averaged roughly 4.13 million units—the largest annual total in 5 years. Condominium and co-op sales increased for the 6th consecutive month in December, rising 1.7% to a pace of 590,000 units, which is the highest monthly reading since late 2009. In addition, sales increased 10.7% during 2012 to a calendar year average of 527,000 units.
Existing home inventories shrank further to close out 2012, sliding to 1.82 million units available for sale in December. At the current sales rate, the estimated inventory for December represents 4.4 months of supply, approximately 2 months smaller than December 2011 and the lowest since May 2005. Distressed sales accounted for 24% of the overall sales volume in December 2012 as foreclosures and short sales both represented an identical 12% share of total sales.
The median sales price for existing homes of all types increased on a year-over-year basis for the 10th consecutive month during December 2012, rising 11.5% to $180,800. This represents the longest sustained period of growth in median prices since August 2005 to May 2006 and is also the largest percentage increase in more than 7 years. Foreclosure sales sold at an average discount of 17% and short sales fetched a discount of 16%. First-time homebuyers accounted for 30% of existing sales while investors purchased 21% of existing homes sold in December. Approximately 29% of sales went to all-cash buyers in December 2012, a 2 percentage-point decline compared to December 2011.