Real Estate Articles

Gains in Sales Lift Housing Market Prospects

There are encouraging signs indicating perhaps the economy and particularly the housing market may be stabilizing, as sales continue to climb and home prices return to more affordable levels. Reports from the National Association of REALTORS® and the California Association of REALTORS® both indicate a turnaround in the housing market, reflecting more buyers appear to be hopping off their perch and seeing see what’s out there.

NAR reported this week existing-home sales increased in February, reversing losses in January. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January, but still 4.6 percent below the February 2008 level.

First-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges. “Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” NAR chief economist Lawyence Yun said. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago, when the median was $195,800 and conditions were close to normal. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” Yun explained.

Recovery in the West is much stronger than expected, according to Yun. “Strong sales gains in the West are led by California, where the median listing price is beginning to rise for the first time in three years,” he said.

In its February sales and price report, the California Association of REALTORS® reported home sales in the state increased 83 percent in February compared with the same period a year ago, while the median price of an existing home declined 40.8 percent.

Closed escrow sales of existing, single-family detached homes in California totaled 620,410 in February at a seasonally adjusted annualized rate. Statewide home resale activity increased 83 percent from the revised 338,970 sales pace recorded in February 2008.

The median price of an existing, single-family detached home in California during February 2009 was $247,590, a 40.8 percent decrease from the revised $418,260 median for February 2008, C.A.R. reported.

It is important to note that the market varies according to local conditions, according to Julia Truesdale Keady, president of the Silicon Valley Association of REALTORS®. “Buyers should consult a REALTOR® who is knowledgeable about conditions in their area, and who can help them arrive at a decision that is right for them,” Keady said.

The C.A.R. report disclosed the median price for a Santa Clara County home fell 40.1 percent, from $680,000 in February 2008 to $407,000 in February 2009. Statewide, the 10 cities with the highest median home prices in California during February 2009 were: Santa Barbara, $897,500; San Francisco, $640,000; Arcadia, $635,000; Redondo Beach, $630,000; San Mateo, $630,000; San Clemente, $630,000; Huntington Beach, $592,500; Yorba Linda, $565,000; San Ramon, $560,000; Redwood City, $550,000; Irvine, $546,000; and Fountain Valley, $542,500.

The positive news regarding home sales was released the same day the U.S. Commerce Department announced an unexpected rise in durable goods orders. Orders of big ticket items expected to last at least three years climbed 3.4 percent last month, better than the expected 2.5 percent decline, and the strongest gain in more than a year.
 

The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, e-mail , or phone (408) 200-0109.

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