Existing-home sales last month were down slightly but they remain at about a 4.6 million level, as they have since January, so if that level holds for the remainder of the year we could see a strong 2012, NAR Chief Economist Lawrence Yun said at a press conference in Washington today.
The relatively strong performance this first quarter stems from the improving economy, Yun said. But it also has to do with the pent-up demand that’s been building for the last several years. At some point, people doubling up or living with parents will start forming households, as they always do when the population increases, and many of these households will buy. Yun thinks we’re seeing signs of this now.
Along with the relatively high level of sales, inventories are down, which helps on prices, and that’s reflected in the numbers. The national median home price is up more than 2 percent from last year.
It’s possible larger homes are being sold (normal for this time of year), so that could account for some of the price increase. But also distressed sales as a percentage of the market are starting to decline. So, that could be having an impact on prices, too.
All in all, despite the slight dip in volume, the picture looks relatively good going into the spring buying season.