Price Increases Balancing to Benefit Buyer and Seller -NAR

Home price growth continued torndecelerate during the second quarter and the National Association of Realtors (NAR) saidrnthe quarter ended with year-over-year price appreciation at the slowest pacernsince 2012.  The national median pricernfor an existing single family home in the second quarter was $212,400, a 4.4rnpercent increase from the median of $203,400 in the second quarter ofrn2013.  The year-over-year median pricernincrease in the first quarter of 8.3 percent.  </p

Thernpattern held in many metropolitan areas as well as fewer MSAs saw rising pricesrnin the second quarter than in the first. rnOfrn173 metropolitan areas tracked by NAR, 122 or 71 percent posted price gains inrnthe second quarter over the same period in 2013.  Forty seven areas or 27 percent had lowerrnmedian prices for the comparable periods. rnIn the first quarter 74 percent of the metropolitan areas postedrnyear-over-year increases and for 37 areas those gains were in double digitrngains compared to only 19 areas in the second quarter. </p

Metro area condominium andrncooperative prices – covering changes in 62 metro areas – showed the nationalrnmedian existing-condo price was $211,100 in the second quarter, up 5.9 percentrnfrom the second quarter of 2013 ($199,300). Forty-seven metro areas (76rnpercent) showed increases in their median condo price from a year ago; 15 areasrnhad declines. </p

LawrencernYun, NAR chief economist, says price increases are balancing out to benefit bothrnbuyers and sellers. “National median home prices began their most recent risernduring the first quarter of 2012 but had climbed to unsustainable levels givenrnthe current pace of inflation and wage growth,” he said. “At this slower butrnhealthier rate, homeowners can continue steadily building equity. Meanwhile,rnfor buyers, increased supply with moderate price gains is giving them betterrnopportunities to choose.” </p

Despiternthe stabilization in price growth, Yun said sharp increases still exist in somernmarkets and are impacting sales, notably on the West Coast where inventoryrnshortages are more prevalent.  He calledrnfor more new construction for both homeownership and rentals to alleviate pricernand rent pressures and accommodate the growing population in that area.  </p

Salesrnof existing homes including single family houses and condominiums increased 5.8 percent in the second quarter to arnseasonally adjusted annual rate of 4.87 million units compared to 4.60 millionrnin the first quarter, but sales were 4.5 percent below the 5.10 million pacernduring the second quarter of 2013. </p

Shortrnsales and sales of foreclosed homes represented 12 percent of transactionsrnduring the second quarter, down from 17 percent a year earlier.  Yun pointed out that the lessening influence ofrndistressed homes in the marketplace would probably mean fewer appraisalrnproblems.  </p

Lower interest rates and a slight 0.7rnpercent rise in the national family median income ($64,751) led to improvedrnbuying power in a majority of metro areas during the second quarter. Tornpurchase a single-family home at the national median price, a buyer making a 5rnpercent downpayment would need an income of $47,816 and $40,266 would be neededrnfor a 20 percent downpayment. </p

Thernhousing inventory increased by 6.5 percent compared to the second quarter ofrn2013.  There were an estimated 2.30rnmillion existing homes for sale in the quarter, an average supply of 5.6 monthsrnup from 5.1 months the previous year but still below the 6 to 7 month supplyrnNAR says represents a rough balance between buyers and sellers.</p

NAR President Steve Brown says evenrnwith the increase in supply, Realtors across the country are reporting thatrnproperties are selling faster than earlier in the year. “The improving economyrnand lower interest rates are increasing the pool of interested buyers,” hernsaid. “On the contrary, competition remains tight and all-cash offers are stillrna common occurrence. This inevitably is causing hesitation for some first-timernbuyers, who are more likely to have lower downpayments and need to securernfinancing amidst tight credit conditions.”</p

Regionally, total existing-homernsales in the Northeast rose 5.1 percent in the second quarter but are 4.1rnpercent below the second quarter of 2013. The median existing single-familyrnhome price in the Northeast was $255,500 in the second quarter, down slightlyrn(0.9 percent) from a year ago.</p

In the Midwest, existing-home salesrnincreased 9.4 percent in the second quarter but remain 6.1 percent below a yearrnago. The median existing single-family home price in the Midwest increased 4.4rnpercent to $167,600 in the second quarter from the same quarter a year ago.</p

Existing-homernsales in the South climbed 3.4 percent in the second quarter but are 1.0rnpercent below the second quarter of 2013. The median existing single-familyrnhome price in the South was $187,300 in the second quarter, 3.7 percent above arnyear earlier.</p

Inrnthe West, existing-home sales rose 7.1 percent in the second quarter but remainrn9.0 percent below a year ago. The median existing single-family home price inrnthe West jumped 7.3 percent to $297,400 in the second quarter from the secondrnquarter of a year ago.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.