Prices and sales levels on the rise
According to the National Association of Realtors (NAR), existing home sales (completed transactions) rose 3.4 percent in the month of April, up 10.0 percent over the year while national median existing home prices rose 10.1 percent year over year to $177,400 in April, up 3.1 percent from March. NAR Chief Economist, Dr. Lawrence Yun said in a statement, “This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent. For the year we’re looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013.”
Housing inventory levels rose 9.5 percent from March to 2.54 million existing homes for sale, a 6.6 month supply at the current sale pace, up from a 6.2 month supply in March. Inventory levels have improved, however, and are 20.6 percent below a year ago when the inventory levels hit a 9.1 month supply. NAR notes that the record for unsold inventory was 4.04 million in July 2007.
Dr. Yun said, “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices. The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”
Additionally, Dr. Yun noted, “A diminishing share of foreclosed property sales is helping home values. Moreover, an acute shortage of inventory in certain markets is leading to multiple biddings and escalating price conditions.” He observed that some areas with tight supply include the Washington, D.C., area; Miami; Naples, Fla.; North Dakota; Phoenix; Orange County, Calif.; and Seattle. “We expect stronger price increases in most of these areas.”
Housing facts from NAR
According to the NAR, in April:
- Distressed homes accounted for 28 percent of sales, down 1.0 percent for the month and 9.0 percent for the year.
- Foreclosures accounted for 17 percent of sales, short sales accounted for 11 percent.
- Foreclosures sold for an average discount of 21 percent below market value.
- Short sales sold for an average discount of 14 percent below market value.
- First time buyers rose 2.0 percent to account for 35 percent of buyers.
- All cash sales accounted for 29 percent of sales, down 3.0 percent from March and 2.0 percent for the year.
- Investors account for 20 percent of sales, within 1.0 percent of where it has been for over a year.
- Single-family home sales rose 3.0 percent to 4.09 million in April, 9.9 percent higher than the pace in April 2011.
- The median existing single family home price was $178,000 in April, up 10.4 percent year over year.
- Condo and co-op sales rose 6.0 percent for the month, 10.4 percent for the year, and hit 530,000 units for April.
- The median existing condo price was $172,900 in April, up 8.1 percent from April 2011.
Regional performance varied for the month, showing widespread signs of improvement, according to NAR:
- Existing-home sales in the Northeast rose 5.1 percent to an annual level of 620,000 in April and are 19.2 percent higher than a year ago. The median price in the Northeast was $256,600, up 8.8 percent from April 2011.
- Existing-home sales in the Midwest increased 1.0 percent in April to a pace of 1.03 million and are 14.4 percent above April 2011. The median price in the Midwest was $141,400, up 7.4 percent from a year ago.
- In the South, existing-home sales rose 3.5 percent to an annual level of 1.79 million in April and are 6.5 percent higher than a year ago. The median price in the South was $153,400, up 8.0 percent from April 2011.
- Existing-home sales in the West increased 4.4 percent to an annual pace of 1.18 million in April and are 7.3 percent above April 2011. The median price in the West was $221,700, a surge of 15.9 percent from a year ago.