The National Association of Realtors® (NAR) said today that a sellers' market is developing in real estate as home sales edge up and home prices continue to rise steadily compared to year-ago levels.  Sales in January were up in every region of the country except the West which continues to be plagued by limited inventories.

Existing sales of single-family homes, townhomes, condominiums and co-ops, increased 0.4 percent in January to a seasonally adjusted annual rate of 4.92 from a downwardly revised 4.90 million (from 4.94 million) in December.  Sales were 9.1 percent above the 4.51 million-unit pace one year earlier.

Sales of single-family homes increased 0.2 percent to a seasonally adjusted annual rate of 4.34 million from 4.33 million in December, and are 8.5 percent above the 4.00 million-unit level in January 2012.  Existing condominium and co-op sales rose 1.8 percent to 580,000 from 570,000 in December, 13.7 percent higher than the 510,000-unit level a year earlier. 

Lawrence Yun, NAR chief economist, said tight inventory is a major factor in the market.  "Buyer traffic is continuing to pick up, while seller traffic is holding steady," he said.  "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly.  We've transitioned into a seller's market in much of the country."

Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes, a 4.2-month supply at the current sales pace, down from 4.5 months in December.  This is the lowest housing supply since April 2005 when it was also 4.2 months.  Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.  Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.

"We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth," Yun explained.

The national median existing-home price for all housing types rose 12.3 percent to $173,600.  January was the 11th consecutive month of year-over-year price increases and was the strongest gain since November 2005 when prices had a 12.9 percent annual increase.   The median existing single-family home price in January was $174,100 and the median condo price was $169,600.  These prices represented annual increases of 12.6 percent and 9.4 percent respectively.

Foreclosures represented 14 percent of January sales and 9 percent were short sales.  This was down from an aggregate distressed sales share of 24 percent in December and 35 percent in January 2012.  Foreclosures sold for an average discount of 20 percent while short sales were discounted 12 percent.

The median time on market for all homes was 71 days in January, down from 73 days in December and 99 days in January 2012.  Short sales were on the market for a median of 94 days, while foreclosures typically sold in 47 days and non-distressed homes took 75 days; 31 percent of all homes sold in January were on the market for less than a month.

First-time buyers accounted for 30 percent of purchases in January, unchanged from December; and investors for 19 percent.  Twenty-eight percent of transactions were cash sales compared to 29 percent in December.

Regionally, existing-home sales in the Northeast increased 4.8 percent to an annual rate of 650,000 in January and are 12.1 percent above January 2012.  The median price in the Northeast was $230,500, up 2.4 percent from a year ago.

Sales in the Midwest rose 3.6 percent in January to a pace of 1.16 million and are 17.2 percent higher than a year ago.  The median price in the Midwest was $131,800, which is 8.6 percent above January 2012.

Existing home sales increased 1.0 percent in the South to an annual level of 1.96 million in January and are 14.0 percent above January 2012.  The median price in the South was $152,100, up 13.4 percent from a year ago.

Existing-home sales in the West fell 5.7 percent to a pace of 1.15 million in January and are 5.7 percent below a year ago.  The median price in the West was $239,800, which is 26.6 percent above January 2012.