Second Quarter Home Sales Dip as Housing Supply Dwindles

August 14, 2012 (Chris Moore)

Completed transactions of existing home purchases were slightly lower in the second quarter of 2012 than in the first quarter according to the National Association of Realtors® (NAR) as a dwindling supply of homes left home buyers with fewer choices.

Existing home sales, which include single-family homes, townhomes, condos, and co-ops, fell to a seasonally adjusted rate of 4.54 million in the second quarter, down from 4.57 million in the first quarter, a decline of 0.7 percent. Compared to the second quarter of last year, sales were still 8.6 percent higher than the 4.18 million seasonally adjusted transactions.

Lawrence Yun, chief economist of NAR, stated, “It’s most encouraging to see a growing number of metro areas with rising median prices, which is improving the equity position of existing homeowners. Inventory has been trending down and home builders are still under-producing in relation to growing demand. Some of the improvement in prices is due to a smaller share of sales in low price ranges where inventory is tight.”

Regional Home Sales:

Existing home sales in the Northeast declined by 0.6 percent from the first to the second quarter but were 10.6 percent higher than in the second quarter of last year, while in the Midwest, sales increased by 1.3 percent from the previous quarter and were 16.2 percent higher than last year’s sales pace.

In the South, existing home sales in the second quarter moved higher by 1.3 percent over the first quarter and were 7.7 percent higher than the second quarter of 2011, and in the West, transactions from the previous quarter fell by 5.3 percent but were still 3.0 percent higher than the second quarter of last year.

Home Prices:

The national median existing home price increased 7.3 percent, rising from $169,100 in the second quarter of 2011 to $181,500 in the second quarter of this year.

The median price in the Northeast was $241,300 in the second quarter, which was 1.6 percent lower than during the same quarter last year, while the median price in the Midwest was $149,400, up 7.5 percent from the second quarter of last year.

In the South, the median price for the quarter was $163,200, a gain of 7.4 percent from a year ago and, and in the West, the median price was $234,000, up 13.4 percent from the second quarter last year.

Out of the 147 Metropolitan Statistical Areas (MSAs) in the survey, 110 saw an increase in home prices during the quarter from a year ago, while three MSAs reported prices were unchanged and 34 saw prices decline from the second quarter of 2011.

Cash and Distressed Property Sales:

Distressed property sales accounted for 25 percent of all existing home sales in the second quarter, down from 33 percent in the second quarter of 2011.

Cash sales accounted for 29 percent of all sales in the second quarter, down from 32 percent in the first quarter, while investors jumped in and purchased 19 percent of the homes sold during the quarter, down from 22 percent in the first quarter.

Housing Inventory:

The number of homes available for sale in at the end of the second quarter plummeted 24.4 percent to 2.39 million homes from 3.16 million homes a year earlier.

Tags: existing home sales, investors, distressed property sales, median home price

Source:
NAR