According to the National Association of REALTORS®, existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September. Tighter underwriting standards and the credit/liquidity crunch are constraining housing markets in local areas, where the housing demand remains strong, said the Silicon Valley Association of REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2 percent in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.
Lawrence Yun, NAR chief economist, said the market is performing unevenly. "Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," he said. "At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines."
The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C.
NAR President Richard F. Gaylord sees problems with the implementation of mortgage guidelines. "It appears there is some over-reaction on the part of some lenders now in requiring higher down payment percentages than may be necessary," he said. "On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don't have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing."
Gaylord advises buyers to consult a Realtor to learn about the kind of financing that would suit their needs. "Consumers should consult with a REALTOR® in their area to learn about the kind of financing that may be available to meet their needs," he stated.
Local Realtor officials stress the same point. Leannah Hunt, president of the Silicon Valley Association of REALTORS®, said not all housing markets are the same. In Silicon Valley, the demand for housing remains strong, but tighter underwriting standards and the effects of the credit/liquidity crunch are constraining sales.
"There are still many tools available for buyers. An experienced Realtor will be able to analyze the market and point buyers in the right direction," said Hunt, a longtime Realtor with Coldwell Banker in Palo Alto.
Single-family home sales nationwide fell 2.7 percent in March from 4.47 million in February, and are 18.4 percent below the 5.33 million-unit pace in March 2007. The median existing single-family home price was $198,200 in March, down 8.3 percent from a year ago.
Existing condominium and co-op sales rose 3.6 percent to a seasonally adjusted annual rate of 580,000 units in March from 560,000 in February, but are 25.5 percent below the 779,000-unit level a year ago. The median existing condo price was $219,400 in March, which is 2.8 percent lower than March 2007.
Regionally, existing-home sales in the Northeast rose 2.2 percent in March, but are 18.8 percent below March 2007. In the West, existing-home sales rose 2.2 percent, but are 22.3 percent below a year ago. In the South, existing-home sales fell 3.5 percent and are 20 percent below March 2007. Existing-home sales in the Midwest dropped 6.5 percent and are 15.9 percent below a year ago.
The median price in the Northeast was $284,300, up 4.6 percent from a year ago. In the West, the median price was $285,100, 14.7 percent lower than March 2007. The median price in the South was $167,200, down 7.1 percent from a year ago. The median price in the Midwest was $152,600, down 5.3 percent from March 2007.
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 email or call the SILVAR office at (408) 200-0100.