Real Estate Central

WASHINGTON, June 26 /PRNewswire-USNewswire/ — Sales of existing-home
sales increased in May with buyers responding to lower home prices,
according to the National Association of Realtors(R).

Existing-home sales — including single-family, townhomes, condominiums
and co-ops — increased 2.0 percent to a seasonally adjusted annual rate(1)
of 4.99 million units in May from a level of 4.89 million in April, but are
15.9 percent below the 5.93 million-unit pace in May 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate
Specialists in Long Beach, Calif., said buyers are seeing value in the
current housing market. “Home buyers are starting to get off the fence and
into the market, drawn by drops in home prices in many areas and armed with
greater access to affordable mortgages,” he said. “Today’s buyer plans to
stay in a home for 10 years, which is a good strategy for building
long-term wealth.”

The national median existing-home price(2) for all housing types was
$208,600 in May, down 6.3 percent from a year ago when the median was
$222,700.

Lawrence Yun, NAR chief economist, said there’s still a lot of
inventory in the market. “The large supply of homes on the market clearly
favors buyers, and it should take several months to draw the inventory
down,” he said. “Stabilization in home prices can only occur with buyers
returning to the market, so we are encouraged by rising home sales,
particularly in distressed markets. Foreclosures and short sales appear to
be a larger part of the market, particularly in California, and are
creating a drag on current home prices.”

Total housing inventory at the end of May fell 1.4 percent to 4.49
million existing homes available for sale, which represents a 10.8-month
supply(3) at the current sales pace, down from a 11.2-month supply in
April.

Although conditions remain mixed around the country, unpublished
snapshot data shows a number of areas are experiencing much higher sales
activity than May 2007, including Sacramento, the San Fernando Valley and
Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.

“Keep in mind that the volume of home sales is the primary driver of
economic activity that is tied to housing,” Yun said. “It’d be premature to
say the improvement marks a turnaround. The market is fragile, so a
first-time home buyer tax credit and a permanent raise in loan limits would
be important steps to get the housing engine humming.”

According to Freddie Mac, the national average commitment rate for a
30-year, conventional, fixed-rate mortgage rose to 6.04 percent in May from
5.92 percent in April; the rate was 6.26 percent in May 2007.

Single-family home sales rose 1.6 percent to a seasonally adjusted
annual rate of 4.41 million in May from 4.34 million in April, but are 14.5
percent below the 5.16 million-unit pace in May 2007. The median existing
single-family home price was $206,700 in May, which is 6.8 percent below a
year ago.

Existing condominium and co-op sales increased 5.5 percent to a
seasonally adjusted annual rate of 580,000 units in May from 550,000 in
April, but are 24.6 percent lower than the 769,000-unit level a year ago.
The median existing condo price(4) was $223,400 in May, down 2.1 percent
from May 2007.

Regionally, existing-home sales in the Midwest rose 5.5 percent in May
to a pace of 1.16 million but are 16.5 percent lower than a year ago. The
median price in the Midwest was $165,300, which is 0.7 percent below May
2007.

In the Northeast, existing-home sales rose 4.6 percent to an annual
rate of 910,000 in May, but are 15.0 percent below May 2007. The median
price in the Northeast was $278,000, down 2.4 percent from a year ago.

Existing-home sales in the West increased 2.0 percent to an annual pace
of 1.02 million in May, but are 12.8 percent below a year ago. The median
price in the West was $286,600, which is 16.0 percent lower than May 2007.

In the South, existing-home sales slipped 0.5 percent to an annual rate
of 1.91 million in May, and are 17.0 percent below May 2007. The median
price in the South was $175,000, down 4.3 percent from May 2007.

The National Association of Realtors(R), “The Voice for Real Estate,”
is America’s largest trade association, representing 1.2 million members
involved in all aspects of the residential and commercial real estate
industries.

Notes:

(1) The annual rate for a particular month represents what the total
number of actual sales for a year would be if the relative pace for that
month were maintained for 12 consecutive months. Seasonally adjusted annual
rates are used in reporting monthly data to factor out seasonal variations
in resale activity. For example, home sales volume is normally higher in
the summer than in the winter, primarily because of differences in the
weather and family buying patterns. However, seasonal factors cannot
compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes,
condominiums and co-ops, are based on transaction closings. This differs
from the U.S. Census Bureau’s series on new single-family home sales, which
are based on contracts or the acceptance of a deposit. Because of these
differences, it is not uncommon for each series to move in different
directions in the same month. In addition, existing-home sales, which
generally account for 85 percent of total home sales, are based on a much
larger sample — nearly 40 percent of multiple listing service data each
month — and typically are not subject to large prior-month revisions.

(2) The only valid comparisons for median prices are with the same
period a year earlier due to the seasonality in buying patterns.
Month-to-month comparisons do not compensate for seasonal changes,
especially for the timing of family buying patterns. Changes in the
geographic composition of sales can distort median price data. Year-ago
median and mean prices sometimes are revised in an automated process if
more data is received than was originally reported.

(3) Total inventory and month’s supply data are available back through
1999, while single-family inventory and month’s supply are available back
to 1982. Condos were tracked quarterly prior to 1999 when single-family
homes accounted for more than nine out of 10 purchases (e.g., condos were
9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1
percent in 1982).

(4) Because there is a concentration of condos in high-cost metro
areas, the national median condo price can be higher than the median
single-family price. In a given market area, condos typically cost less
than single-family homes.

Existing-home sales for June will be released July 24, and the next
Forecast/Pending Home Sales Index is scheduled for July 8.

Information about NAR is available at http://www.realtor.org. This and other
news releases are posted in the News Media section. Statistical data in
this release, other tables and surveys also may be found by clicking on
Research.

See Also:

• Bankrate: Mortgage Rates, Like Fed, Hold Steady
• Real Estate Technology Company Shares DOJ Compliant Gateway
• Lexington Realty Trust Announces Pricing of Public Offering of 3,000,000 Common Shares
• Bankrate: Mortgage Rates, Like Fed, Hold Steady
• Chappell Build Ltd Expert Opinion to Combat Today’s Energy Crisis - Save Energy & the Planet Plus Improve Your Living Environment with a Loft Conservation and Insulation

[Via Real Estate Newswire]