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39 » VISIT US ONLINE @ DSNEWS.COM INVENTORY AND COST REMAIN TOP CONCERNS Existing home sales slipped 3.6 percent to 5.57 million in December from a downwardly revised 5.78 million in November 2017, according to the monthly existing home sales report released by the National Association of Realtors (NAR). However, 2017 as a whole saw existing home sales increase 1.1 percent to 5.51 million, surpassing the 5.45 million recorded in 2016 and the highest since 2006, the report said. "Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand," said Lawrence Yun, Chief Economist at NAR. According to the report, total housing inventory at the end of December dropped 11.4 percent to 1.48 million existing homes available for sale, 10.3 percent lower than a year earlier after falling year-over-year for 31 consecutive months. Properties typically stayed on the market for 40 days in December, which is unchanged from November and down from a year ago. Forty- four percent of homes sold in December were on the market for less than a month. "Market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. ese two factors ultimately muted what should have been a stronger sales pace," Yun said. "Closings scaled back in most areas last month for this same reason." According to Tendayi Kapfidze, Chief Economist at LendingTree, buyers continue to face a market with limited choices in 2018. "Under 2 million homes have been available for sale since October 2016, and December's 1.48 million homes for sale represent just 3.2 months' worth of inventory. Rising rates and the tax plan could further reduce inventory in 2018 as current homeowners face disincentives for moving," Kapfidz explained. e report indicated that first-time buyers accounted for 32 percent of sales in December, up from 29 percent in November and unchanged from a year ago. e median existing-home price for all housing types in December was $246,800, up 5.8 percent from December 2016. "Rising wages and the expanding economy should lay the foundation for 2018 being the turning point towards an uptick in sales to first- time buyers. However, if inventory conditions fail to improve, higher mortgage rates and prices will further eat into affordability and prevent many renters from becoming homeowners," Yun said. AMAZON'S HQ2: WHAT IT MEANS FOR HOUSING Amazon has released its candidate list of cities for its second headquarters, otherwise known as "HQ2." According to Amazon, the direct hiring and investment, construction, and ongoing operation of Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community. at increase in jobs and investment could bring widespread and lasting economic growth to the winning city's region. In light of this, Apartment List released an analysis to discover how the new Amazon headquarters will impact the housing market in the metro it moves to. "No matter which city is chosen, the influx of 50,000 high-paid Amazon workers and 66,250 supplementary workers over a 10-year period will put pressure on local housing markets, driving up rent and home prices," the report notes. Apartment List's analysis leverages data from the U.S. Census and Bureau of Labor Statistics to determine how much new housing a metro can build, the amount of slack in the housing market, and the impact of an influx of high-wage workers. While all of the metros analyzed would essentially experience some type of rental housing growth from the Amazon HQ2—the difference is in the amount of growth that could occur. Particularly, the report projects that Raleigh, North Carolina; Columbus, Ohio; Indianapolis; Pittsburgh; and Nashville, Tennessee, will experience the rent increase the most, with additional annual rent growth between 1.2 percent and 2 percent. Meanwhile, the impact will be smaller in metros with large housing stocks such as Washington, D.C., Los Angeles, Dallas, and New York, with additional annual rent growth projected at or below 0.5 percent a year. "In Seattle, home of the company's current headquarters, the influx of high-paid Amazon employees has coincided with rent increases that outpace almost all other U.S. cities and the fastest growth rate in home prices nationwide," the report added.

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