The latest survey from the National Association of REALTORS® shows most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas. REALTOR® officials attribute the healthy rise in home sales to buyers taking advantage of the first-time home buyer tax credit.
Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rate of 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the pace in the third quarter of 2008. Sales increased from the second quarter in 45 states and the District of Columbia, with 28 states and D.C. seeing double-digit gains. Year-over-year sales were higher in 32 states and D.C.
"We can't underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector," said Lawrence Yun, NAR chief economist. "It's given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The tax credit is allowing buyers to set aside any reservations about waiting for a better deal."
During the third quarter, 123 out of 153 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.
The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter.
"The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market," Yun said. "Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures."
The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.
Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.
Existing-home sales in the West increased 5.6 percent in the third quarter to an annual rate of 1.19 million and are 4.6 percent above a year ago. The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4 percent below the third quarter of 2008.
"We are confident that recent actions by the federal government to extend conforming loan limits, especially in high-cost areas like Silicon Valley, as well as the extension and expansion of the home buyer tax credit, will help keep the market stable in our region," said Silicon Valley Association of REALTORS® president Julia Truesdale Keady. "These programs are a window of opportunity for serious buyers. Buyers now have a second chance, but they need to have a contract in place by April 30, 2010 in order to receive the tax credit."
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.
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