NAR: Some Areas Now Seeing Sellers' Markets

by devteam May 10th, 2013 | Share

Despite rising home prices in U.S.rnmetropolitan areas in the first quarter, the National Association of Realtors® (NAR)rnsaid today that home affordability remains high.  The year-over-year price increase posted inrnQuarter One was the largest in over seven years but NAR figures show that therntypical buyer earns nearly double the income needed to purchase a median pricedrnhome in his or her area.</p

The median price of an existingrnsingle-family home rose to $176,600 in the first quarter compared to $158,600 arnyear earlier, an 11.3 percent jump and the strongest increase since Q4 2005</bwhen the increase was 13.6 percent.   Ofrnthe 140 metropolitan statistical areas (MSA) tracked by NAR 133 showed anrnannual increase in median prices; the same number  which showed an annual increase in Q4 butrnnearly double the number, 74, with such a year-over-year improvement in thernfirst quarter of 2012. </p

NAR said that some of the price increasernreflected a shrinking market share of lower priced homes and distressed salesrnand greater activity in the higher price ranges.  Distressed sales had a 23 percent share of thernmarket in the first quarter compared to a 32 percent share a year earlier.</p

Median prices of condo and condominium prices located in metropolitan areas rosern4 percent on an annual basis in the first quarter, to $172,400.  Thirty-nine metros out of the 54 tracked byrnNAR showed increases in their median condo price from a year ago and 15 areasrnhad declines.</p

Lawrence Yun, NAR chief economist, saidrnmany areas are experiencing a seller’s market.  “The supply/demand balancernis clearly tilted toward sellers in a good portion of the country,” hernsaid.  “Inventory conditions are expected to remain fairly constrained thisrnyear, so overall price increases should be well above the historic gain ofrnone-to-two percentage points above the rate of inflation.  If homernbuilders can continue to ramp up production, then home price growth is expectedrnto moderate in 2014.”</p

Total existing-home sales including single-family and condos rose 0.8rnpercent to a seasonally adjusted annual rate of 4.94 million in the firstrnquarter, the highest since the fourth quarter of 2009 when homebuyer taxrncredits were in place.  The rate was anrnincrease of 4 percent from the fourth quarter pace of 4.90 million and 9.8rnpercent higher than a year earlier.</p

NAR said that to qualify to purchase arnhome at the national median price during the first quarter a borrower with a 20rnpercent downpayment would need an income of $30,700.  With only a five percent downpayment thernqualifying income would be $36,500.  The<bnational median income was $62,200.  </p

At the end of the first quarter there were 1.93 million existing homesrnavailable for sale, which is 16.8 percent below the close of the first quarterrnof 2012, when 2.32 million homes were on the market.</p

Existing-home sales in the Northeast rose 4.4 percent in the first quarterrnand are 9.1 percent above the first quarter of 2012.  The median existingrnsingle-family home price in the Northeast rose 2.9 percent to $234,000 in thernfirst quarter from a year ago.</p

In the Midwest, existing-home sales increased 1.2 percent in the firstrnquarter and are 15.0 percent higher than a year ago.  The median existingrnsingle-family home price in the Midwest increased 8.2 percent to $135,100 inrnthe first quarter from the same quarter last year.</p

Existing-home sales in the South edged up 0.7 percent in the first quarterrnand are 13.3 percent above the first quarter of 2012.  The regional medianrnexisting single-family home price was $156,800 in the first quarter, up 9.3rnpercent from a year earlier.</p

In the West, which is the region most impacted by limited housing supplies,rnexisting-home sales slipped 1.1 percent in the first quarter but are 0.6rnpercent above a year ago.  The median existing single-family home price inrnthe West jumped 24.4 percent to $247,800 in the first quarter from the firstrnquarter of 2012.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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