Existing-home sales increased in May with buyers responding to lower home prices, according to the National Association of REALTORS®. The Silicon Valley region also saw gains in home sales during this period.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 2 percent to 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the May 2007 sales figure.
NAR President Richard F. Gaylord said buyers are seeing value in the current housing market. "Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," he said. "Today's buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth."
The national median existing-home price for all housing types was $208,600 in May, down 6.3 percent from a year ago when the median was $222,700.
Lawrence Yun, NAR chief economist, said there's still a lot of inventory in the market. "The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down," he said. "Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices."
Although conditions remain mixed around the country, unpublished snapshot data shows a number of areas are experiencing much higher sales activity than May 2007, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.
Leannah Hunt, president of the Silicon Valley Association of REALTORS® (SILVAR), said, "The housing market in Silicon Valley continues to remain healthy. At the weekly Realtor tour meetings, SILVAR members report sales are picking up, if not 'robust' in our region, and each month we are seeing an increase in sales. There are more buyers and more multiple offers, and every month appears better than the last nine months."
MLSListings Inc., SILVAR's Multiple Listing Service, indicates there were 873 closed sales of single family homes for Santa Clara County in May 2008, up from 654 in April and 583 in March. Average Days on Market has been reduced from 55 to 47 days and the average price of homes in May was $970,702.
"As Realtors, our biggest challenge is getting this news across to the public," said Hunt, who is a Realtor with Coldwell Banker in Palo Alto. "The public has been bombarded by so much negative news about the real estate market, but people need to know we have a healthy climate in the Silicon Valley region. The numbers that detail that it is, indeed, a good time to buy a home."
NAR's chief economist maintains a cautious outlook for much of the nation. "Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing," Yun said. "It'd be premature to say the improvement marks a turnaround.
The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming."
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.
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