Dayton area home sales bucked the national trend for December, increasing 9.5 percent above the same month a year ago to close out 2016 as the best year on record for sales of existing homes.
A new December record of 1,175 single-family homes and condominiums were sold last month in the Dayton area, compared to 1,073 sales in December 2015, according to the Dayton Area Board of Realtors reported Tuesday. That brought the total for last year to 16,079 — a new annual sales record, and a 10 percent increase from 14,623 in 2015.
“This wasn’t totally unexpected,” said Karen O’Grady, DABR president and associate partner and sales agent for Coldwell Banker in Dayton. “We did great all year long. We’re anticipating a good 2017 as well. We should either maintain the record or surpass it this year.”
By comparison, U.S. existing home sales slid 2.8 percent last month to a seasonally adjusted rate of 5.49 million, down from November’s revised existing sales pace of 5.65 million units, the National Association of Realtors said Tuesday. Still, the annual rate for existing sales was 5.45 million last year — the highest annual rate since 1999.
In addition, sales prices continued to climb last month, offering further evidence that the housing market recovery remained intact, both locally and nationally.
The average sales price in the Dayton area rose 2.8 percent to $138,101 in December, compared to the same month a year earlier, while the median price rose 10 percent to $119,900, the DABR reported. The average price was a new December record, and came at the end of the year in which average monthly sales prices set an all-time record of $161,380 last June.
Dayton’s rising home prices were part of the national trend in which the median existing home price in December was $232,200, up 4 percent from a year ago and representing the 58th-straight month of year-over-year gains, according to the NAR.
But the housing market will face headwinds in the coming months.
The prospect of rising interest rates, which helped fuel sales most of last year, is now a reality. The average fixed-rate, 30-year mortgage in December rose to its highest level since April 2014 at 4.20 percent, up from from 3.77 percent in November, according to data from mortgage-lender Freddie Mac.
Mortgage rates have risen steadily since the Federal Reserve raised its benchmark interest rate in December by 25 basis points. The Fed has promised three more rate hikes this year, which would have a direct impact on mortgages.
But rates are still near historic lows, and a gradual increase in rates is unlikely to douse the demand for housing in Dayton, O’Grady said: “Interest rates are so low at this time that even if they inched up slightly people are still going to see a good values.”
The biggest concern for the housing market both nationally and in the Dayton area is the lack of available homes to satisfy demand.
The number of homes listed for sale in the Dayton area in 2016 fell 6 percent to 20,816, compared to the previous year, according to the DABR. Nationally, the supply of houses on the market dropped to the lowest level since 1999 last month and was down 6.3 percent from a year ago, the NAR reported.
But tight supplies continue to drive up prices. And as prices bounce back, O’Grady said, more people will be able to leverage the equity in their homes to move into new houses when the peak selling season begins: “A lot more inventory will be coming online in the spring, and we expect unit sales to pop.”