A recent National Association of REALTORS® report shows sales of existing homes rose by the largest amount in more than five years in September, citing buyers appear to be responding to improved housing affordability conditions.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from August, and are 1.4 percent higher than in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. "The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island," he said. "The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike."
NAR President Richard F. Gaylord said low home prices and low interest rates have been attracting buyers. "This is the first time since November 2005 that home sales have been above year-ago levels," he said. "Credit tightened at the end of September, but the improvement demonstrates that buyers who've been on the sidelines want to get into the market to make a long-term investment in their future."
Yun cautioned about market disruptions. "The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners," he said.
"Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory."
During a visit with members of the Silicon Valley Association of REALTORS® in October, California Association of REALTORS® Past President Vince Malta said C.A.R. is seeking to make the temporary conforming loan limit of $729,750 permanent. This temporary conforming loan limit of $729, 750 will disappear on Dec. 31, 2008, and the new conforming loan limit of $625,500 will take effect January 1, 2009.
The national median existing-home price for all housing types was $191,600 in September, down 9 percent from a year ago when the median was $210,500. "Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices," Yun explained.
Single-family home sales increased 6.2 percent in September from August, and are 3.8 percent above the level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the September 2007 figure. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent in September, and are 34.4 percent higher than September 2007. In the Midwest, existing-home sales increased 4.4 percent, but are 2.5 percent below a year ago. Existing-home sales in the South rose 2.2 percent but remain 7.8 percent below September 2007. In the Northeast, existing-home sales slipped 1.2 percent, and are 7.7 percent lower than a year ago.
The median price in the West was $253,600, down 18.5 percent from a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007. The median price in the South was $167,200, down 4.1 percent, while the median price in the Northeast was $246,800, down 5.4 percent from September 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.
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