By Inman News®
Median single-family existing-home prices rose on a yearly basis in just over half of 146 markets tracked by the National Association of REALTORS® in the first quarter, indicating prices are stabilizing, the trade group said today. Nationally, the U.S. median single-family existing-home price dipped 0.4 percent from a year ago in the first quarter, to $158,100. Real estate owned (REO) and short-sale properties, typically sold at a discount, accounted for 32 percent of sales in the first quarter, down from 38 percent a year ago.
“Home prices lag sales activity because the transactions were negotiated mostly in the previous quarter,” said Lawrence Yun, NAR’s chief economist, in a statement. “Given the steadily dwindling supply of inventory and notably higher listing prices that are being negotiated today, prices are expected to show further improvements in the near future.”
At the end of the first quarter, for-sale inventory stood at 2.37 million existing homes, down 21.8 percent year over year. Inventories have been declining since a record 4.04 million in the summer of 2007, NAR said. “We now have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges. This is good news for many sellers who wish to list now, or for those waiting for prices to improve,” Yun said. Total sales of existing single-family homes and condominiums in the U.S. rose 5.3 percent on an annual basis in the first quarter to a seasonally adjusted annual rate of 4.57 million. “This is the highest first-quarter sales pace since 2007. With strong market fundamentals, total home sales this year should rise 7 to 10 percent,” Yun said. Regionally, sales rose the most in the Midwest, 11.7 percent year over year, to 1.02 million. The region posted a slight annual increase in median sale price, 0.8 percent, to $125,300.
In the Northeast, sales increased 6.6 percent to 590,000. The region’s median sales price dropped 3.2 percent from a year ago to $226,300.
The South saw a 4.1 percent jump in sales, to 1.76 million, and 1.2 percent rise in median price, to $143,600.
The West saw the smallest sales increase, 1.4 percent, to 1.2 million. Median price in the region fell slightly, 0.9 percent, to $196,200. First-time buyers accounted for a third of sales nationwide in the first quarter, a slight year-over-year increase. Cash buyers, mostly investors, made up 32 percent of sales last quarter, while investors made up 22 percent. Of 146 metro areas, 74 saw median sales prices increase year over year in the first quarter, compared to only 29 in the fourth quarter. Of the 20 metro areas to see the highest year-over-year jumps in sales prices in the first quarter, five were in Florida. Cape Coral-Fort Myers, Fla., saw the biggest price jump, 28.1 percent, to $117,600.
Nonetheless, half of the 20 metros were in the Midwest, with Grand Rapids, Mich., posting the biggest increase in that region, 19 percent, to $96,500.
Among the top 20 metros with the sharpest annual price decreases, eight were in the Northeast, five were in the South, four were in the Midwest, and three were in the West.
Kingston, N.Y., saw the biggest decline, 22 percent, to $156,800, followed by Bridgeport-Stamford-Norwalk, Conn., down 18 percent to $334,000. While only four of the 20 metros that saw the biggest price increases had median sales prices above the national median in the first quarter, eight among those with the sharpest declines had medians above the national level.
With today’s report, NAR also released a new metro-by-metro analysis on the qualifying incomes to purchase a median-priced existing single-family home, assuming 5, 10 or 20 percent down payments and a mortgage interest rate of 4 percent with 25 percent of gross income devoted to mortgage principal and interest. Nationally, median family income was $61,000 in the first quarter, NAR reported. At the national median home price, a buyer making a 5 percent down payment would need a $34,700 income; that drops to $32,900 and $29,300, respectively, for those making 10 or 20 percent down payments, the association said. “Qualifying incomes are well below median incomes in most of the country, which means homebuyers generally can stay well within their means,” Yun said. “For example, a buyer in Indianapolis making a 10 percent down payment would need an annual income of $24,004 to purchase a median-priced home, while in Seattle it would be $55,300. For now, buyers are facing an extraordinarily advantageous situation if they can obtain a mortgage.”