2012 home sales: Best in 5 years

Steady December home sales capped the best year for the U.S. real estate market in five years, according to an industry trade group report Tuesday.

The National Association of Realtors said that December sales of previously-owned homes came in just slightly below November’s sales pace, but up 12.8% from a year ago. That brought full-year sales to 4.65 million, up 9% from 2011 and the best year for home sales since 2007, when there were 5 million homes sold just before the start of the recession.

Sales are being helped by a combination of strong market fundamentals — near record low mortgage rates, lower unemployment and a rebound in home prices, all of which are bringing in buyers into the market who had been waiting for it to hit bottom. The mortgage rates and years of depressed home prices have also combined to create the most affordable housing market on record, according to the Realtors group.

And the Realtors are predicting strong sales should continue into 2013 and beyond. It has a forecast for 5.1 million existing home sales this year, and 5.4 million next year.

The improved demand for homes in December led to the inventory of homes for sale to fall to 1.82 million homes on the market, the lowest supply since January 2001. One factor in tightening supplies is a drop in foreclosures and other distressed home sales, which made up only 24% of home sales in December compared to 32% a year ago. The tighter supply, and the drop in distressed sales, have helped to lift home prices so that the median sales price for the year rose to $176,600, up 6.3% from 2011. That’s the biggest gain in prices in since the bubble year of 2005.

The rebound in the market for previously-owned homes is also showing up in the market for new homes, where sales rebounded to their highest levels since 2009, while housing starts reached the highest level since 2008.

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About reinhartsouth

2008 wasn’t the best time to open a new office, but the Charles Reinhart Company looked to expansion as the way to ensure the future. Reinhart South, now located on the corner of State Street and Eisenhower Boulevard in Ann Arbor, opened January 7, 2008 in a small office on Washtenaw Avenue. Facing the bleakest economic situation since the great depression, Manager Dawn Foerg began the process of recruiting top real estate talent to the company. One agent at a time, South grew. By early 2009, 15 agents called the South office home. Still fighting the economic crises, the office grew to more than 40 licensed Realtors by the end of 2010. Today, South is among the five top producing offices in Ann Arbor.
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