According
to the National Association of Realtors® (NAR) home sales rose in every state during
the third quarter compared to the same period one year earlier but prices
continued to decline. The median price of a single family home
declined from the third quarter of 2010 in 111 of the 150 metropolitan
statistical areas (MSAs) tracked by the Association and rose in 39. In the second quarter 41 MSAs had annual
price gains.
Lawrence Yun, NAR
chief economist said that the market is holding fairly even. "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," he said. "The good news is inventory levels have
been trending gradually down."
Home sales which include single family
residences, condominiums, and cooperative apartments, were down nationwide by
0.1 percent to a seasonally adjusted annual rate of 4.880 million units
compared to 4.883 million in the second quarter but this was 17 percent above
the 4.170 million pace recorded during the third quarter of 2010. That quarter, it should be noted, began just
as the popular homebuyer tax credits expired.
Every state posted a
gain but in 45 states (including the District of Columbia) those increased sales over
a year ago were in double digit territory.
The greatest increases were in North Dakota (+39.1 percent), Utah (+38.2
percent), and Nebraska (36.1 percent). On
a regional basis, sales in the Midwest were up 25.1 percent, 16.7 percent in
the West, 15.5 percent in the South, and 11.6 percent in the Northeast.
Median prices
nationally declined 4.7 percent from 177,800 in the third quarter of 2010 to
$169,500 in the most recent period.
Distressed homes accounted for 30 percent of home sales compared to 33
percent in the second quarter and typically sold at a discount of about 20
percent.
NAR noted that median prices are a reflection of
the types of homes that are selling and can be misleading at times because the
level of foreclosures can vary notably in given markets. Annual price
measures generally smooth out any quarterly swings.
Metropolitan area median condominium and
cooperative prices were $167,600 in the third quarter, down 2.2 percent from
the third quarter of 2010. Twelve metros of the 54 MSAs tracked by NAR
showed increases in the median condo price, the remaining 42 declined.
The median existing single-family home price in
the Northeast fell 6.5 percent from the third quarter of 2010 to $236,700. In the Midwest and the South median prices declined
2.2 percent to $142,300 and $153,200 respectively. The median existing single-family home price
in the West dropped 9.0 percent to $205,700 in the third quarter from the same
quarter of 2010. "Western home sales are dominated by cash investors in
the lower price ranges," Yun explained.
NAR's Housing
Affordability Index which measures the relationship between median home price,
median family income, and mortgages interest rates stood at 183.8 in the
third quarter, the second highest on record behind the first quarter of
2011. The higher the index, the greater the household purchasing
power.
Twenty-nine percent of home purchases during the
quarter were all cash compared to 30 percent in the second quarter and 29
percent one year earlier. Investors, who
make up the bulk of cash purchasers, accounted for 20 percent of transactions
in the third quarter compared to 19 percent in both the second quarter and a
year ago.
First-time buyers purchased 32 percent of homes,
down from 35 percent in the second quarter and 34 percent in the third quarter
of 2010. Historically, entry-level buyers are responsible for about 40
percent of home purchases.
NAR President Ron Phipps 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. 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."