Existing Home Sales, Prices Lower in September

Existing home sales including single-familyrnhouses, townhouses, condos, and co-ops posted a decline in September accordingrnto data released today by the National Association of Realtors^®.  Sales of all property types were down 3.0rnpercent on a seasonally adjusted basis to an annual rate of 4.91 million inrnSeptember from an upwardly revised (from 5.03 million) figure of 5.06 in August.rn Despite the drop, sales were still well abovernthe 4.41 million annual pace in September 2010 when the market was still feelingrnthe effects of the homebuyers’ tax credit expiration.</p

There were 433,000 completed transactions inrnSeptember compared to 503,000 in August, a decline of 13.9 percent.  Single family sales totaled 380,000 duringrnthe month for a seasonally adjusted annual rate of 4.33 million compared torn444,000 sales in August, an annual rate of 4.49 million.   Year-over-year single family sales improvedrnby 12.2 percent.    </p

There were 53,000 condominium or cooperativernapartment sales in September compared to 59,000 in August, a gain of 1.8rnpercent seasonally adjusted but -10.2 percent on an unadjusted basis.   Condo/co-oprnsales were up 5.6 percent on an adjusted annual basis. </p

Lawrence Yun, NARrnchief economist, said the market has been stable although at low levels, andrnthere is plenty of room for improvement.  “Existing-home sales havernbounced around this year, staying relatively close to the current level in mostrnmonths,” he said.  “The irony is affordability conditions have improved tornhistoric highs and more creditworthy borrowers are trying to purchase homes,rnbut the share of contract failures is double the level of September 2010. rnEven so, the volume of successful buyers is higher than a year ago and isrnremaining fairly stable – this speaks to an unfulfilled demand.”</p

All regions posted higher sales in Septemberrn2011 than one year earlier, but only the Northeast posted an August tornSeptember gain.  There sales rose 2.6rnpercent to an annual level of 790,000 in September and are 6.8 percent above arnyear ago.  Midwestrnsales slipped 0.9 percent in September to a pace of 1.09 million but remained 17.2rnpercent higher than September 2010.  In the South, existing-home salesrndeclined 2.6 percent to an annual level of 1.89 million in September but arern10.5 percent above a year ago and in the West sales fell 8.8 percent to anrnannual pace of 1.14 million in September but are 10.7 percent higher thanrnSeptember 2010.  </p

“The falloff in Western sales from a surge inrnAugust was expected because many lenders had lowered mortgage loan limits overrnconcerns that sales wouldn’t close before the higher loan limits expired at thernend of the September,” Yun said.  “Given the concentration of higher costrnhousing in the West, particularly in California, many buyers were motivated tornclose in the months leading up to the changeover while they could still get lowrninterest rates on conventional mortgages. </p

Existing Home Sales</p

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Eighteen percent of NAR members reported theyrnhad experienced failures of sales under contract during the month, the same asrnreported in August.  One year ago 9rnpercent made such reports.   NARrnattributes contract failures to cancellations caused by declined mortgagernapplications, failures in loan underwriting from appraised values coming inrnbelow the negotiated price, or other problems including home inspections andrnemployment losses.</p

The median price for existing homes fell 3.5rnpercent in September to $165,400 compared to the median price of $171,400 inrnSeptember 2010.  The median single-familyrnhome price is 165,600, 3.9 percent below the 172,400 price in 2010 and thernmedian condo/coop cost 163,800 compared to 165,500 (-1.0 percent.)  Average home prices showed smaller butrnsimilar changes.</p

Both median and average house prices were downrnin every region on an annual basis.  Thernlargest drop was in the West where median prices fell 4.5 percent; the bestrnperformance was in the Midwest with a decline of 1.4 percent.</p

Existing Home Prices</p

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Total housing inventory at the end of Septemberrndeclined 2.0 percent to 3.48 million existing homes available for sale, whichrnrepresents an 8.5-month supply at the current sales pace, compared with anrn8.4-month supply in August.   There wasrnan 8.2 months supply of single family homes, unchanged from August and an 11.0rnmonth backlog of condos and co-ops compared to 10 months in August. </p

30 percent of September transactions were allrncash compared to 29 percent in both August and in September 2010.  Investor purchases constituted 19 percent ofrnsales during the month, down from 22 percent in August but slightly higher thanrnthe 18 percent in September 2010.  Thirty-twornpercent of buyers were purchasing for the first time, identical to thernfirst-time buyer share in August and one year earlier.  </p

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