Home Resales Increase in First Quarter

Washington, DC, May 10, 2011 -- Existing-home sales continued to recover in the first quarter with gains recorded in 49 states and the District of Columbia, according to the National Association of Realtors.

However, just 22% of the available metropolitan areas saw prices rise from a year ago, according to the latest NAR survey.

Total existing-home sales, including single-family and condo, rose 8.3% to a seasonally adjusted annual rate1 of 5.14 million in the first quarter from 4.75 million in the fourth quarter, and are slightly below a 5.18 million pace during the same period in 2010.

The median existing single-family home price rose in 34 out of 153 metropolitan statistical areas.

Lawrence Yun, NAR chief economist, said home prices are all over the map.

“The reading of quarterly price data can be volatile because they are based on the types of homes that are sold during the quarter. 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,” he said. “Annual price data provides a better guide about the direction of the market in those areas.”

The national median existing single-family home price was $158,700 in the first quarter, down 4.6% from $166,400 in the first quarter of 2010.
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“The biggest sales increase has been in the lower price ranges, which are popular with investors and cash buyers,” Yun said.

“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.”

Investors accounted for 21% of first quarter transactions, up from 18% a year ago, while first-time buyers purchased 32% of homes, down from 42% in the first quarter of 2010 when a tax credit was in place.

Repeat buyers accounted for a 47% market share in the first quarter, up from 40% a year earlier.

“The rising sales trend in nearly all states is a part of the healing process to clear off inventory. Sales need to rise before prices can firm up,” Yun added.

NAR President Ron Phippssaid strong sales of distressed homes are exactly what the market needs.