Home prices are on a sustained uptrend in all regions of the country, even though the number of single-family homes, townhouses, condominiums, and co-ops that sold declined 1.5% in May, NAR said.
“The recovery is occurring despite excessively tight credit conditions and higher down payment requirements, which are negating the impact of record high affordability conditions,” said NAR Chief Economist Lawrence Yun.
Total existing-home sales fell to 4.55 million in May from 4.62 million in April, but are 9.6% above the 4.15 million-unit pace in May 2011.
Inventory shortages in certain areas have been building all year, Yun said. “The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand,” he said. “The normal seasonal upturn in inventory did not occur this spring. Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier.”
There are broad-based shortages of inventory in the lower price ranges in much of the country except the Northeast.
In the West, supply is extremely tight in all price ranges except for the upper end. “REALTORS® in Western states have been calling for an expedited process to get additional foreclosed properties onto the market because they have more buyers than available property,” Yun added.
Widespread inventory shortages also are found in much of Florida.
If home sales continue at the current pace, it would take 6.6 months to sell all the homes on the market. There was a 6.5-month supply of homes for sale in April. At the trough of the market in July 2010, there was a 12.1-month supply of homes for sale.
Home prices up
The national median existing-home price for all housing types rose 7.9% to $182,600 in May from a year ago, the third consecutive month of year over year price gains. That’s the first time the market has posted three monthly back-to-back price increases since March to May of 2006. “Some of the price gain results from a shrinking share of distressed homes in the sales mix,” Yun explained.
Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 25% of May sales (15% were foreclosures and 10% were short sales), down from 28% in April and 31% in May 2011. Foreclosures sold for an average discount of 19% below market value in May, while short sales were discounted 14%.
First-time buyers accounted for 34% of purchasers in May, compared with 35% in April and 36% in May 2011.
All-cash sales slipped to 28% of transactions in May from 29% in April; they were 30% in May 2011. Investors, who account for the bulk of cash sales, purchased 17% of homes in May, down from 20% in April, and 19% in May 2011. “These figures reflect a modest increase in traditional repeat home buyers in May,” Yun said.
Single-family home sales slipped 1.0% in May, but are 10.4% above May 2011. The median existing single-family home price was $182,900 in May, up 7.7% from a year ago.
Existing condominium and co-op sales fell 5.7% in April, but are 4.2% higher than one year ago. The median existing condo price was $180,000 in May, which is 8.8% above May 2011.
Regional home sales
Regionally, existing-home sales in the Northeast fell 4.8% in May but are 7.3% higher than May 2011. The median price in the Northeast was $250,700, up 3.8% from a year ago.
Existing-home sales in the Midwest rose 1.0% in May and are 19.5% above a year ago. The median price in the Midwest was $147,700, up 6.4% from May 2011.
In the South, existing-home sales slipped 0.6% to in May but are 9.2% higher May 2011. The median price in the South was $159,700, up 7.8% from a year ago.
Existing-home sales in the West declined 3.4% in May but are 3.6% above a year ago. The median price in the West was $233,900, up 13.4% from May 2011. “The sharp price increase in the West results largely from more sales at the upper end of the market,” Yun explained.