Home prices stabilized in the second quarter with more metropolitan areas in the country showing increases from a year ago, according to the latest survey by the National Association of REALTORS®.
In the second quarter, 100 out of 155 metropolitan statistical areas (MSAs) had higher median existing single-family home prices compared with the second quarter of 2009, with 14 experiencing double-digit increases.In the first quarter of this year, 91 areas had higher prices, while only 26 MSAs experienced annual price gains the same period last year. The year-over-year median sales price for single-family homes was up by 26 percent in the San Jose area and up 25 percent in the San Francisco area.
The national median existing single-family price was $176,900 in the second quarter, up 1.5 percent from $174,200 in the same period of 2009. Distressed homes accounted for 32 percent of second quarter sales, down from 36 percent a year ago.
"Now as more normal, non-distressed home sales are occurring, the median price in many areas is showing higher values," NAR chief economist Lawrence Yun interpreted the price data.
Total state existing-home sales, including single-family and condo, rose 9.1 percent to a rate of 5.61 million in the second quarter from 5.14 million in the first quarter, and were 17.3 percent above the second quarter of 2009.
Price gains were aided by a surge in home sales spurred by the home buyer tax credit. Now that the tax credit has elapsed, as expected, home sales fell in June. Prices in most areas appear to be headed the same direction. The real estate website trulia.com reported Wednesday that 25 percent of home sellers with listings this month had dropped their price at least once.
Trulia reports Las Vegas saw 56 percent, the most dramatic increase, in month-over-month price reductions. Cities in California also experienced notable increases in price reductions, with San Diego and Los Angeles increasing by 15 percent and 12 percent respectively, from July to August. Fresno saw a 28 percent increase in the rate of price reductions, while San Jose experienced a 13 percent increase.
Jeff Bell, president of the Silicon Valley Association of REALTORS®, says a dip in sales and home prices is expected due to weakening demand in the absence of other government tax incentives. "We are seeing the market stabilize as it enters a period without any government stimulus package. It's a natural transition that is to be expected," Bell said.
Bell, a Realtor with Coldwell Banker in Cupertino, said with mortgage interest rates still at historic lows, it is still a good opportunity for serious buyers with good credit and stable income. He noted sellers, too, can take advantage of the market by pricing their home right.
"Market conditions vary depending upon location. A sale can be jeopardized when there are price reductions. Arriving at the right price the first time is key to a successful sale," Bell explained. "Sellers should seek the advice of a REALTOR® who is knowledgeable about local market conditions, and who can assist them in arriving at the right price for their home."
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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