The housing recovery is underway according to the National Association of Realtors® (NAR) which released numbers on Tuesday to back up that claim. Existing home sales rose from March to April and are well above sales one year ago. Prices are on the rise as well and the improvements were felt across all regions of the country.
Total existing home sales in April including single-family homes, townhomes, condominiums, and cooperative apartments increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million. This was an increase of 3.4 percent from March although those figures were revised down from an original estimate of 4.48 million to 4.47 million. April sales were 10.0 percent higher than the 4.30 million-unit level one year earlier.
Single-family sales rose to 4.09 million in April from 3.97 million in March, an increase of 3.0 percent. The annual rate of sales is 9.9 percent higher than in April 2011. Condo and co-op sales increased 6.0 percent to an annual rate of 530,000 in April from 500,000 and are 10.4 percent higher than the 480,000 sales pace one year earlier.
NAR chief economist Lawrence Yun said, “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices. The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”
On a non-seasonally adjusted basis there were 400,000 home sales in April, an increase of 11.1 percent from the 360,000 existing home sales in March and an annual increase of 6.7 percent. It was the first time since last august when 429,000 homes sold that sales in a single month reached the 400,000 mark. Single family sales were 355,000 compared to 316,000 (+12.3 percent) in March and 375,000 (+6.6 percent) in April 2011.
Prices were also up. The national median existing-home price for all housing types jumped 10.1 percent to $177,400 from one year earlier following a 3.1 percent annual improvement in March. “This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent,” Yun said. It was also the third straight monthly increase and the median price is now $22,800 higher than at its recent low point in January. Yun said that, “For the year we’re looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013.”
The median price of a single family home was $178,000 in April compared to $161,300 a year earlier, an increase of 10.4 percent. The median price for a condo was $172,900, an 8.1 percent change from $159,900 in April 2011.
Distressed homes – foreclosures and short sales – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011. Foreclosures sold for an average discount of 21 percent below market value in April, while short sales were discounted 14 percent.
The housing inventory rose at the end of April to 2.54 million existing homes available for sale. The NAR said that 9.5 percent increase, which it termed as seasonal, brought the inventory to a 6.6 month supply at the current sales pace compared to a 6.2 month supply in March. The inventory is 20.6 percent below that of a year earlier when there was a 9.1 month supply.
Yun said that declining inventories as well as the diminishing share of distressed property sales are helping home values and in certain markets there is actually an acute shortage of inventory which is leading to multiple biddings and escalating price conditions. Some areas with tight supply include the Washington, DC, area; Miami; Naples, Florida; North Dakota; Phoenix; Orange County, California; and Seattle. Yun said, “We expect stronger price increases in most of these areas.”
First-time buyers rose to 35 percent of purchasers in April from 33 percent in March. They were 36 percent in April 2011. All-cash transactions fell to 29 percent in April from 32 percent in March and 31 percent in April 2011. Investors, who account for the bulk of cash sales, purchased 20 percent of homes in April, compared with 21 percent in March and 20 percent in April 2011.
Regionally, existing-home sales in the Northeast rose 5.1 percent to an annual level of 620,000 in April and are 19.2 percent higher than a year ago. In the Midwest sales increased 1.0 percent to 1.03 million, 14.4 percent higher than a year earlier. Sales rose 3.5 percent in the South to an annual level of 1.79 million in April and are 6.5 percent higher than a year ago and in the West they were up 4.4 percent to an annual pace of 1.18 million, 7.3 percent above April 2011.
The West, which has borne much of the brunt of falling home prices, saw a price surge last month. The median price in April was $221,700, an increase of 15.9 percent on an annual basis. Median price and annual changes in the other regions were: Northeast, $256,600 (+8.8 percent); Midwest $141,400 (+7.4 percent); and South $153,400, (+8.0 percent.)