Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter of 2009, with many more metro areas seeing prices rise from a year earlier, according to the latest survey by the National Association of Realtors (NAR).
Sales increased from the third quarter in 48 states and the District of Columbia, and 32 states saw double-digit gains. Year-over-year sales were higher in 49 states and D.C., and all but three states had double-digit annual increases.
Total state existing-home sales, including single-family and condo, jumped 13.9% to a seasonally adjusted annual rate of 6.03 million in the fourth quarter from 5.29 million in the third quarter, and are 27.2% above the 4.74 million-unit level seen in the fourth quarter of 2008. Distressed property accounted for 32% of fourth-quarter transactions – down from 37% a year earlier.
The first-time home buyer tax credit was the dominant factor in existing-home sales growth, says NAR's chief economist, Lawrence Yun.
"The surge in home sales was driven by buyers responding strongly to the tax credit, combined with record low mortgage interest rates," he says. "With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring, with more areas showing higher prices."
In the fourth quarter, 67 out of 151 metropolitan statistical areas reported higher median existing single-family home prices in comparison with the fourth quarter of 2008, including 16 with double-digit increases; one was unchanged; and 84 metros had price declines, NAR says. In the third quarter, only 30 MSAs showed annual price increases, and 123 areas were down.
The national median existing single-family price was $172,900, which is 4.1% below the median price in the fourth quarter of 2008.
"This is the smallest price decline in over two years, with the most recent monthly data showing a broad stabilization in home prices," Yun says.
"Because buyers are taking on long-term fixed-rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price-recovery process appears durable," he adds.
In the condo sector, metro-area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $177,300 in the fourth quarter – down 4.8% from the fourth quarter of 2008. Eleven metros showed increases in the median condo price from a year earlier, and 43 areas had declines. In the third quarter, only four metros experienced annual price gains.
SOURCE: National Association of Realtors