Total existing-home sales slumped by 3.2% in January to a seasonally adjusted annual rate of 5.38 million, according to the National Association of Realtors. The annual rate during December 2017 was 5.56 million.
Sales are down by 4.8% compared to this time a year ago, which is the lowest annual drop since August 2014.
Once again, low inventory is at the forefront of the market’s problems. Housing inventory actually increased by 4.1% last month to 1.52 million existing homes available for sale. Good news, right? Sort of. Inventory is still 9.5% lower than a year ago and has fallen year-over-year for 32 consecutive months, according to the NAR. Unsold inventory is at a 3.4-month supply at the current sales pace.
NAR chief economist Lawrence Yun believes the market desperately needs a correction from a supply standpoint to
“While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace,” Yun said. “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
The good news for agents and sellers is that prices increased for the 71st consecutive month. The median existing-home price in January was $240,500, up 5.8% from January 2017.
Agents can seriously control the market by accumulating a sufficient inventory of listings. Not only can you grow your network by connecting with sellers and buyers, you’ll put yourself in a prime position to cash in on the current market conditions. Until supply meets demand, housing prices should continue to rise.
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