Ten-X.com (formerly Auction.com), an online real estate marketplace, has released its recently rebranded Ten-X Residential Real Estate Nowcast, projecting that existing home sales for January will fall between seasonally adjusted annual rates of 5.13 and 5.46 million annual sales, with a targeted number of 5.29 million – up 9.8 percent from a year ago, but down 3 percent from the previous month.
“On a year-over-year basis, it looks like January will get 2016 off to a good start,” Ten-X Executive Vice President Rick Sharga said in a news release. “It’s apparent now that November sales figures were artificially low due to delays associated with the new TRID processes, and December numbers were artificially inflated as lenders quickly worked through the backlog. What we’re seeing online suggests that homebuyers are slightly more active than they were last year at this time, which is a good sign for the housing market.”
Last week, the National Association of Realtors (NAR) released its existing home sales data for December, reporting a 14.7 percent month-over-month increase in home sales to 5.46 million units, following a substantial drop in November. Ten-X Chief Economist Peter Muoio predicted that a bounce back would occur by early 2016, but the correction appears to have happened even more quickly than anticipated, causing another volatile swing in existing home sales numbers.
“Putting the sudden drop and bounce aside, existing home sales in November and December averaged a 5.11 million rate – close to the 5.26 SAAR average pace that persisted across 2015,” Muoio said. “This supports our view that several positive underlying fundamentals – a healthy job market, wage gains, improved consumer confidence and low interest rates – have supported the housing market recovery and should lead to increased sales moving into 2016.”
Home prices remain strong. NAR recently reported a 7.6 percent year-over-year increase in median existing home prices in December to $224,100 – well within the range of $212,156 - $234,488 that Ten-X predicted last month. Findings from the Ten-X Real Estate Nowcast suggest sales prices for existing homes will fall between $216,839 and $239,664 in the month of January with a targeted price of $228,251, representing a 15.5 percent year-over-year increase.
“The lack of inventory and the mix of properties being sold – largely in the mid-to-upper price range in most markets – continue to drive home prices up,” Sharga said. “At some point this may become a problem from an affordability standpoint, especially if interest rates go up as well.”