Existing-Home Sales Rise, Helped by Lower Prices
A real estate group says U.S. home prices posted a gain in the second quarter, another sign that the ailing housing market is finally coming to life.
The National Association of Realtors says the median sales price in the quarter was $174,100, up 4 percent from the first quarter, but still almost 16 percent below a year ago.
Prices were still down from a year ago in 129 out of 155 metropolitan areas the group tracks.
Total sales rose to a seasonally adjusted annual rate of 4.76 million, from 4.58 million in the first quarter, but were still about 3 percent below a year ago.
Thirty-nine states reflected sales increases from the first quarter, and nine states were higher than one year ago.
"With low interest rates, lower home prices and a first-time buyer tax credit, we've been seeing healthy increases in home sales, which are a hopeful sign for the economy," said Lawrence Yun, NAR chief economist.
Foreclosures and short sales made up more than one-third of the sales, weighing down home prices. The national median price was $174,100 — 15.6 percent lower on the year.
The largest sales gain between the first and second quarters was in Idaho, up 67.5 percent; followed by Hawaii which rose 24.2 percent; New York, up 22.3 percent, Wisconsin; with a 21.7 percent gain; and Nebraska with a 20.3 percent increase. Twelve other states experienced double-digit sales increases from the first quarter.
Year over year, California, Minnesota and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year.
Sharp price declines have continued to be concentrated in areas with high levels of foreclosures, such as California, Florida, Arizona and Nevada.
The biggest metro area price drop, of nearly 53 percent, was in Fort Myers, Fla. Prices also fell 35 percent or more in Phoenix, Riverside, Calif. and Las Vegas. The biggest price gain, of nearly 31 percent, was in Davenport, Iowa, followed by Cumberland, Md., at nearly 22 percent.
Regionally, existing-home sales in the Northeast jumped 15.0 percent in the second quarter, but are 8.4 percent below a year ago. In the midwest, existing-home sales rose 3.2 percent in the second quarter but are 5.3 percent lower on the year.
Sales rose 3.9 percent in the second quarter in the south, 7.2 percent lower on the year. In the west, existing-home sales fell 2.3 percent in the second quarter, but are 11.8 percent above a year ago.
Many economists now say that the worst of the housing recession is over, though foreclosures are expected to rise over the next year.