Housing market sales rise 13 percent nationwide

Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

Sales have now risen nearly 13 percent over the past six months. While they are still well below the 6 million that economists equate with a healthy market, the gains have coincided with other changes in the market that suggest more sales are coming.

“The trend is clearly upward,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

The National Association of Realtors said Wednesday that resales increased 4.3 percent last month to an annual rate of 4.57 million.

Single-family home sales rose 3.8 percent. And the number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That’s still below 40 percent, which tends to signal a healthy market.

In Las Vegas, existing home closings topped 58,000 in 2011 and are off to a fast start with 4,434 in January, a 10.9 percent increase from the same month a year ago, SalesTraq research firm reported.

Resale inventory on the Multiple Listing Service decreased to 8,997 in January, compared with 10,540 in December. It’s down 41 percent from a year ago.

One concern is the housing market is still saturated with homes at risk of foreclosure, which lower broader home prices. Those increased to make up 35 percent of sales nationwide and close to 75 percent in Las Vegas, including short sales, or homes sold for less than the principal mortgage balance.

Foreclosures continue unabated in Las Vegas. More than 100,000 homes have been lost in the past five years, and another 100,000 homes could easily go to foreclosure in the next few years, said Larry Murphy, president of SalesTraq.

Three out of four homes for sale are vacant, a symptom of a greater problem that has depressed home prices to their lowest level in 25 years. What will happen to the 250,000 homeowners who are underwater on their mortgage, owing more than their home is worth?

“For some time now, there has been a huge cloud of uncertainty hanging over the skies of Las Vegas,” Murphy said. “Where will it all end? When will it all end? The future is indeed uncertain, and not knowing what’s going to happen can be worse than knowing, even if the news is bad. If we only knew the eventual outcome, we could at least settle down and begin to plan for it.”

Nationwide, the supply of homes on the market has plunged to 2.3 million, the lowest level since March 2005. At last month’s sales pace, it would take more than six months to clear those homes, consistent with a healthy housing market.

Las Vegas’ supply is down to 2.8 months, Murphy noted.

Most economists said the January report was encouraging, especially when viewed with other recent positive housing data.

Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.

Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit and falling prices.

Review-Journal reporter Hubble Smith contributed to this report.