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April Existing-Home Sales, Prices Up
Daily Real Estate News | Tuesday, May 22, 2012
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Existing-home sales rose in April and remain above a year ago, while home prices continued to rise, according to the National Association of REALTORS®. The improvements in sales and prices were broad based across all regions.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million in April from a downwardly revised 4.47 million in March, and are 10.0 percent higher than the 4.20 million-unit level in April 2011.
Lawrence Yun, NAR chief economist, said the housing recovery is underway. “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,” he said. “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.”
Supply and Demand
Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.
“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,” Yun said.He notes 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.”
The national median existing-home price for all housing types jumped 10.1 percent to $177,400 in April from a year ago; the March price showed an upwardly revised 3.1 percent annual improvement. “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,” Yun said. “For the year we’re looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013.”
Distressed homes — foreclosures and short sales sold at deep discounts – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011. Foreclosures sold for an average discount of 21 percent below market value in April, while short sales were discounted 14 percent.
NAR President Moe Veissisaid home buyers should look into financing in the early stages of their search process. “With the tight lending environment it’s a good idea to consult with a REALTOR® about mortgages and program options in your area, and tips for boosting your credit score well in advance of making an offer on a home,” he said. “It helps to go into the process knowing what it takes to succeed.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to 3.91 percent in April from 3.95 percent in March; the rate was 4.84 percent in April 2011. Last week the 30-year fixed rate dropped to a record weekly low of 3.79 percent; recordkeeping began in 1971.
First-time buyers rose to 35 percent of purchasers in April from 33 percent in March; they were 36 percent in April 2011.
All-cash sales fell to 29 percent of transactions in April from 32 percent in March; they were 31 percent in April 2011. Investors, who account for the bulk of cash sales, purchased 20 percent of homes in April, compared with 21 percent in March and 20 percent in April 2011.
Single-family home sales rose 3.0 percent to a seasonally adjusted annual rate of 4.09 million in April from 3.97 million in March, and are 9.9 percent higher than the 3.72 million-unit pace a year ago. The median existing single-family home price was $178,000 in April, up 10.4 percent from April 2011.
Existing condominium and co-op sales increased 6.0 percent to a seasonally adjusted annual rate of 530,000 in April from 500,000 in March, and are 10.4 percent above the 480,000-unit level in April 2011. The median existing condo price was $172,900 inApril, which is 8.1 percent above a year ago.
Performance by Region
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 andare 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.
Source: NAR
Fading ‘Fear Factor’ Among Home Buyers?
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The real estate market is thawing this spring. Following five years of dismal sales and falling prices, the housing market is starting to see a turnaround, according to housing surveys, agent reports, and economists.
Home buyers are returning to take advantage of record housing affordability while investors are buying up foreclosures in bulk at bargain prices.
“The biggest challenge that we’ve had over the past four years is fear — fear that the economy is collapsing, that property values are collapsing, that the world is coming to an end,” Mark Prather, a broker at ERA Buy America Real Estate in La Palma, Calif., told the Associated Press. “The fear factor is all but gone.”
The signs are already there: Home sales prices are starting to edge up, even in hard-hit housing areas like Phoenix and Miami. Also, banks are issuing more mortgages. JPMorgan Chase recently reported an uptick in loan applications recently by 33 percent, and the bank said that it issued 6 percent more mortgages from January through March than last year. Wells Fargo reported an 84 percent increase in loan applications and the issuing of 54 percent more mortgages in the last year.
Still, the housing market has some ways to go, with a surge of foreclosures expected to soon hit the market and the unemployment rate still high in many parts of the country.
“This gradual healing is encouraging, but we must tread carefully as the housing market is still far from a robust recovery,” Michelle Meyer, an economist at Bank of America Merrill Lynch, told Reuters News.
Source: “US home-buying season finally signaling a recovery,” The Associated Press (April 15, 2012) and “Close to Bottoming, Home Prices May Rise in 2013,” Reuters (April 12, 2012)
2012 Spring housing market is gaining speed!
Well this is refreshing to hear. The 2012 March and April home sales are increasing. It seems that we are on our way back up. Oh it’s not going to be like the early 2002-3 but slowly the stats are showing hope.
“After five consecutive months of gains, the [index] recently began to plateau, with many markets holding steady and a few experiencing the ups-and-downs that are typical in a choppy recovery,” says David Crowe, NAHB’s chief economist. “The [index] is designed to highlight markets that are showing consistent improvement, and those markets that have registered the smallest gains are more susceptible to dropping off the list due to a minor setback in prices, permits or employment. As stronger markets approach stability, it will get harder for them to keep charting improvement, which will also limit the expansion of the [index].”
Spring of Hope is in the air!.
“The fact that the number and geographic distribution of improving housing markets continued to expand beyond the 100 mark in April bodes well for the start of the spring home buying season, and should be an encouraging sign for those who are considering a home purchase,” says Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
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