Real Estate & Area News
Existing Home Sales Dip Slightly in March
The National Association of Realtors reported this week that existing home sales fell slightly from February to March and were well below levels seen at the beginning of the spring buying season a year ago. According to the report, total existing sales for March translates to an annual rate of 4.59 million units, down just a tick from February's annualized pace of 4.6 million. Compared to March 2013, however, the rate is down 7.5 percent from a pace of nearly 5 million last March. In fact, March's pace ties the post-recession low pace set in July 2012.
According to NAR chief economist Lawrence Yun, March sales were quite disappointing in historical terms, and should be higher given the growth of the population. He also noted that there's something of a double-edged sword as prices continue to increase in many markets across the country due to shortages in supply. Yun is optimistic, however, that recent trends will be corrected in the coming months as jobs are created and consumers in the East start looking after the spring season was delayed by a series of storms. Yun contends that conditions are still favorable for the market as interest rates remain low in historical terms and bargains can still be found in many markets across the country.
One of the main barriers to improving sales are home prices, which have rebounded considerably in recent months. The median price paid for all types of home bought in March was $198,500, an improvement of just under 8 percent over the March prior. The improvement is particularly pronounced in the multifamily market, as the median price paid for condos rose more than 11.5 percent between March 2013 and last month. Prices have improved in the single-family market as well, however, with the median gaining about 7.5 percent in that sector.
While sales growth has slowed, according to the NAR's report, the percentage of those sales accounted for by distressed sales has fallen, as well. Foreclosures and short sales accounted for just 14 percent of all sales in March, down from a 16 percent share in February and 21 percent a year ago. At the same time, inventory has been surging and is up 4.7 percent from February and 3.1 percent from last March. The growing supply should help alleviate the upward pressure on prices and, in turn, bring more buyers into the market.
April 23, 2014