Charles Rutenberg Realty Broker/Owner Joe Moshé Comments on Rise in Existing Home Sales in January

Joe Moshé, Broker/Owner, Charles Rutenberg Realty, says that the increase in existing home sales during the month of January shows the ongoing changes in the residential Real Estate market as new home construction has declined but added that it will be a while until the housing market fully recovers. He also said that it is now a buyer’s market, which means a shrinking inventory and higher home prices.

The National Association of REALTORS reported today that existing home sales rose slightly by 0.4% to a seasonally adjusted rate of 4.92 million last month, up from a downwardly revised figure of 4.90 million in December 2012 and up 9.1% above the pace of 4.51 million in January 2012.

The results came out a day after the Commerce Department reported an 8.5% drop in housing starts during the month of January at 890,000, compared to 973,000 in December 2012. “These contrasting results show that the Real Estate market is fluctuating and it is difficult to determine what will happen next,” Mr. Moshé said. “There will be improvement in the Real Estate market but it will take a long time for any true recovery to take place.”

Distressed home sales in January accounted for 23% of all existing home sales, which is down from 24% the previous month, according to the NAR; of that, 9% were short sales and 14% were foreclosures. Short sales were sold at an average discounted rate of 12% below market value and foreclosures were sold an average of 20%. “For those who are looking to enter into a short sales transaction, we have launched a new ‘Done For You’ Short Sales Division, in which our Agents are trained to handle these untraditional sales,” Mr. Moshé said. “These types of transactions will be the norm in the Residential Real Estate market for the next couple of years.”

As more homes are being bought, there are fewer available on the market. NAR stated that total housing inventory at the end of January fell 4.9% to 1.74 million homes for sale. This represents a 4.2-month supply, down from December 2012 — when it was a 4.5-month supply — and matching a low set in April 2005.

“Those who were looking to sell their houses could not do so because they owed more than what their homes were worth or they did not have enough equity,” Mr. Moshé said. “Between that and fewer houses being built, inventory will tighten and home prices will increase even more. We anticipate in the coming months the release of ‘shadow inventory’ by the banks to place more unsold houses on the market, which should satisfy demand and lower prices.”

Charles Rutenberg Realty is one of the nation’s fastest-growing Agencies with more than 1,300 Agents on Long Island, Queens, Westchester, and Manhattan. For more information, call (516) 575-7500, or visit www.crrli.com.