U.S. median sales prices on existing home rose for the second consecutive quarter in the three months ending Sept. 30, according to new figures released today, although prices still remained well below the levels of one year ago.
The National Association of Realtors (NAR) reported that the median sales price on existing homes (not new construction) rose to $177,900 in the third quarter of 2009, up from $174,200 in the second quarter. Total existing home sales were up 11.4 percent, to a seasonally adjusted rate of 5.30 million units, up from 4.76 million in the third quarter.
The third quarter figures represented a 5.6 percent increase in sales over the same period one year ago, although prices remained 11.2 percent below last year's third-quarter figures. The lower prices are credited with spurring sales, although low interest rates and a first-time homebuyer tax credit have had a significant effect as well.
Lawrence Yun, NAR's chief economist, said the current market conditions are the most favorable for buyers that the organization has seen since it began keeping records back in 1970.
"We can't underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector," said Lawrence Yun, NAR chief economist. "It's given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions."
Distressed sales, both foreclosures and short sales, made up 30 percent of existing home sales in the third quarter and continued to be a drag on home prices. Yun said foreclosures will continue to be an issue, but predicted rising sales from the recently extended and expanded homebuyer's tax credit will help stabilize home prices by next spring and limit additional foreclosures.
Still a mixed picture on prices, sales
Both sales figures and median home prices presented a widely varied picture around the nation, with some metropolitan areas showing strong recoveries while others continued to decline. The Cumberland area of Maryland and West Virginia posted the nation's strongest annual price gains, with a median price of $122,100, up 19.2 percent from the third quarter of 2008, followed by the Davenport, Iowa metropolitan region, which posted a 14.3 percent annual gain, to $115,600.
Signs of improvement were also reported in areas like Miami and Orlando, Fla., which posted moderate price gains in the third quarter of the year, although both remained down about 25 percent compared to one year earlier. The Los Angeles, Calif. area reported a 14.3 percent median price increase in the third quarter, though prices are still down 11.5 percent from last year.
Prices in Las Vegas, Nev., however, continued to slide, although at a greatly reduced rate in the third quarter. Median prices in the area were down 2.3 percent decline in the third quarter, a small fraction of the area's 34.5 percent drop from one year ago.
"The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is," Yun said. "The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable."
Regionally, median sales prices on existing homes rose in the third quarter in the West, South and Midwest, with only the Northeast showing a small decline.