By Mike Colpitts
Home sales rose during the first quarter of the year in 49 states as home prices fell in most areas of the U.S. from a year ago, according to the National Association of Realtors. The median price of a home fell in 118 of 153 metropolitan statistical areas the organization tracks.
Existing home sales saw a rise of 8.3% to a seasonally adjusted annual rate of 5.14 million homes, condos and townhouses from 4.75 million units in the last quarter of 2010. However, the pace still represents a slim 0.8% decline from the rate of sales made during the same quarter last year.
The median price of a home rose in 34 of 153 metropolitan statistical areas from the same period, NAR said in a statement. However, 118 other metro markets the Realtors’ organization tracks had median price declines for the year as foreclosures and bank-assisted short sales weigh on the market. Only 22% of metropolitan markets saw any sort of price increase from year ago levels.
“The reading of quarterly price data can be volatile because they are based on the types of homes that are sold during the quarter,” said Lawrence Yun, NAR chief economist. “When buyers principally purchase distressed properties in a given market, the recorded prices will be very low, which is what we’re seeing now in much of the country. Annual price data provides a better guide about the direction of the market in those areas.”
The U.S. median existing home price was $158,700 in the first quarter, down 4.6% from $166,400 in the same quarter of 2010, according to NAR. The median price represents the halfway point of home prices, where half sold for more and half for less.
Foreclosures and short sales composed 39% of sales during the quarter, a slight 3% rise for the same quarter a year ago. But overall home sales are still off the pace for the same quarter a year ago when the federal home buyer tax credit was in effect. Lower priced homes made up the majority of sales.
“The preponderance of sales activity at the lower end is bringing down the median price, so what we’re seeing is the result of a change in the composition of home sales,” said Yun.
Cash paying buyers made up 33% of all home sales to additionally drive down the average price since buyers who pay cash can waive a variety of contingencies, including mortgage financing made in the typical purchase offer.