October 20, 2011 (Chris Moore)
Existing home sales declined in September after a robust August but remained above year ago levels while the high level of distressed property sales continued to put downward pressure on home prices according to the National Association of Realtors (NAR).
Total existing home sales, which include single-family homes, townhomes, condos, and co-ops, were sold at a seasonally adjusted rate of 4.91 million in September, down from a revised 5.06 million in August, a decline of 3.0 percent. Sales were 11.3 percent higher than the 4.41 million units sold in September 2010.
Home prices continued to decline as the national median existing home price fell from $168,300 in August to $165,400 in September. The median home price in September was also down 3.5 percent from a year ago.
Distressed property sales accounted for 30 percent of all existing home sales in September, down from 31 percent in August and down from 35 percent in September 2010. Foreclosure sales made up 18 percent of all existing home sales while short sales accounted for 12 percent of all existing sales.
Lawrence Yun, chief economist at NAR, stated, “Existing-home sales have bounced around this year, staying relatively close to the current level in most months,” he said. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable – this speaks to an unfulfilled demand.”
Purchase cancellations, which first spiked in June, continued to remain at high levels in September as cancellations caused by declined mortgage applications and low appraised values reported by NAR members remained unchanged at 18 percent in September. A year ago, reported purchase cancellations were at 9 percent.
Cash sales accounted for 30 percent of all sales in September, up from 29 percent in August, while investors purchased 19 percent of the homes sold in September, down from 22 percent in August.
There were fewer homes for sale in September as housing inventories dropped 2.0 percent to 3.48 million homes which represents an 8.5 month supply of homes, up from 8.4 months supply in August.
Regionally, existing home sales in the Northeast increased 2.6 percent to an annual pace of 790,000 sales in September and are 6.8 percent higher than September 2010, while existing home sales in the Midwest fell 0.9 percent to a rate of 1.09 million annual sales and are 17.2 percent above year ago levels.
In the South, existing home sales declined 2.6 percent to an annual pace of 1.89 million sales in September and are 10.5 percent above September 2010 levels, and in the West, existing home sales fell 8.8 percent to an annual rate of 1.14 million sales in September and are 10.7 percent below year ago levels.
The median price in the Northeast was $229,100, a decline of 3.3 percent from a year ago, while the median price in the Midwest was $137,400, down 1.4 percent from September 2010.
The median price in the South was $144,400, a decline of 3.0 percent from a year ago and in the West the median price was $207,400, down 4.5 percent from September 2010.
Tags: NAR, existing home sales, investors, distressed property sales, declining prices, low appraisals, cancelled contracts, median home price