Sales up, prices down
Compared to the third quarter of last year, median existing home prices are down while sales are up, according to the National Association of Realtors’ (NAR) third quarter metro area reporting. According to Dr. Lawrence Yun, NAR Chief Economist said the market is holding fairly even, as median existing home prices rose in one in four metro areas from Q3 of last year. The national median existing single-family home price dropped 4.7 percent over the year to $169,500 in the third quarter. Housing affordability, according to NAR is now at the second highest level since they began tracking in 1970.
Dr. Yun said, “Home sales need to recover first – only then can prices stabilize. Existing-home sales are little changed from the second quarter but are notably higher than a year ago. The good news is inventory levels have been trending gradually down.”
Picking up the pace
Existing home sales of single family homes and condos were flat, falling 0.1 percent from the second quarter, but rose 17 percent from the third quarter of last year, picking up the pace in all states. Distressed sales continue to account for roughly one in three sales, hovering at 30 percent in the third quarter, 33 percent in the second quarter and 34 percent in the third quarter of 2010. These distressed sales on average sell at a 20 percent price discount.
Cash buyers has hovered around 30 percent of purchases since the third quarter of 2010 and investors accounted for 20 percent of all transactions in this recent quarter. First time buyers is also hovering around the same level, accounting for 32 percent of purchases in the third quarter, 35 percent in the second quarter and 34 percent in the third quarter of 2010.
Regional performance varied
Regionally, existing home sales varied in the third quarter:
- Northeast – up 0.9 percent from the second quarter, up 11.6 percent year over year.
- Midwest – up 2.5 percent from the second quarter, up 25.1 percent year over year.
- South – unchanged from the second quarter, up 15.5 percent year over year.
- Northeast – up 0.9 percent from the second quarter, up 11.6 percent year over year.
- West – down 2.6 percent from the second quarter, up 16.7 percent year over year.
Regionally, median existing home prices varied in the third quarter:
- Northeast – down 6.5 percent to $236,700 from a year ago.
- Midwest – down 2.2 percent to $142,300 from a year ago.
- South – down 2.2 percent to $153,200 from a year ago.
- West – down 9.0 percent to $205,700 from a year ago.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be notably higher given the buying power in today’s market. “Housing affordability conditions have been at a record high this year, rents are rising and homes are selling for less than the cost of construction in most of the country,” Phipps said. “For people with secure jobs, good credit and long-term plans, today’s conditions will be remembered as a golden opportunity to enter the housing market.”
