WASHINGTON — Sales of US previously owned homes unexpectedly climbed in January to the highest level in eight months as investors used all-cash transactions to snap up distressed properties.
Purchases increased 2.7 percent to a 5.36 million annual rate, figures from the National Association of Realtors show. The share represented by foreclosures and short sales rose to a 12-month high, pushing the median price to the lowest level in almost nine years.
Affluent investors may continue taking a bigger share of the market as credit restrictions and 9 percent unemployment keep first-time buyers at bay. A pickup in job growth is needed to ensure more Americans will be in a position to consider home ownership.
“It is really a foreclosure-driven market,’’ said Ethan Harris, head of developed markets at Bank of America Merrill Lynch Global Research, who projected sales would increase to a 5.38 million rate. “I don’t think it is a sign of the market returning to health.’’
Lawrence Yun, chief economist at the realtors’ group, said distressed sales accounted for 37 percent of total sales last month and all-cash transactions represented 32 percent, three times the average of about 10 percent.
The increase in demand was “encouraging,’’ Yun said in a news conference as the figures were being released yesterday. “Right now it is the cleansing of distressed property that is coming on to the market’’ that is driving sales.
Investors with all-cash offers are rushing in looking for “bargains,’’ he said.
Those sales climbed to about 50 percent of the total in cities like Las Vegas and Miami last month, he said. The share of first-time buyers fell to 29 percent last month compared with an average 40 percent, said Yun.
The median price decreased 3.7 percent from January 2010 to $158,800, the lowest since April 2002. Purchases were up 5.3 percent from a year earlier, when a government tax break was still in effect.
The number of previously owned homes on the market fell 5.1 percent to 3.38 million in January. At the current sales pace, it would take 7.6 months to sell those houses compared with 8.2 at the end of the prior month.
“I think 2011 will be a marginal, weak year in the homebuilding industry,’’ said D.R. Horton Inc.’s chief executive, Donald Tomnitz
Bob Willis Bloomberg News / February 24, 2011