Existing Home Sales, Prices Lower in September
Existing home sales including single-family houses, townhouses, condos, and co-ops posted a decline in September according to data released today by the National Association of Realtors®. Sales of all property types were down 3.0 percent on a seasonally adjusted basis to an annual rate of 4.91 million in September from an upwardly revised (from 5.03 million) figure of 5.06 in August. Despite the drop, sales were still well above the 4.41 million annual pace in September 2010 when the market was still feeling the effects of the homebuyers' tax credit expiration.
There were 433,000 completed transactions in September compared to 503,000 in August, a decline of 13.9 percent. Single family sales totaled 380,000 during the month for a seasonally adjusted annual rate of 4.33 million compared to 444,000 sales in August, an annual rate of 4.49 million. Year-over-year single family sales improved by 12.2 percent.
There were 53,000 condominium or cooperative apartment sales in September compared to 59,000 in August, a gain of 1.8 percent seasonally adjusted but -10.2 percent on an unadjusted basis. Condo/co-op sales were up 5.6 percent on an adjusted annual basis.
Lawrence Yun, NAR chief economist, said the market has been stable although at low levels, and there is plenty of room for improvement. "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."
All regions posted higher sales in September 2011 than one year earlier, but only the Northeast posted an August to September gain. There sales rose 2.6 percent to an annual level of 790,000 in September and are 6.8 percent above a year ago. Midwest sales slipped 0.9 percent in September to a pace of 1.09 million but remained 17.2 percent higher than September 2010. In the South, existing-home sales declined 2.6 percent to an annual level of 1.89 million in September but are 10.5 percent above a year ago and in the West sales fell 8.8 percent to an annual pace of 1.14 million in September but are 10.7 percent higher than September 2010.
"The falloff in Western sales from a surge in August was expected because many lenders had lowered mortgage loan limits over concerns that sales wouldn't close before the higher loan limits expired at the end of the September," Yun said. "Given the concentration of higher cost housing in the West, particularly in California, many buyers were motivated to close in the months leading up to the changeover while they could still get low interest rates on conventional mortgages.
Existing Home Sales
Eighteen percent of NAR members reported they had experienced failures of sales under contract during the month, the same as reported in August. One year ago 9 percent made such reports. NAR attributes contract failures to cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.
The median price for existing homes fell 3.5 percent in September to $165,400 compared to the median price of $171,400 in September 2010. The median single-family home price is 165,600, 3.9 percent below the 172,400 price in 2010 and the median condo/coop cost 163,800 compared to 165,500 (-1.0 percent.) Average home prices showed smaller but similar changes.
Both median and average house prices were down in every region on an annual basis. The largest drop was in the West where median prices fell 4.5 percent; the best performance was in the Midwest with a decline of 1.4 percent.
Existing Home Prices
Total housing inventory at the end of September declined 2.0 percent to 3.48 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, compared with an 8.4-month supply in August. There was an 8.2 months supply of single family homes, unchanged from August and an 11.0 month backlog of condos and co-ops compared to 10 months in August.
30 percent of September transactions were all cash compared to 29 percent in both August and in September 2010. Investor purchases constituted 19 percent of sales during the month, down from 22 percent in August but slightly higher than the 18 percent in September 2010. Thirty-two percent of buyers were purchasing for the first time, identical to the first-time buyer share in August and one year earlier.
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