Home prices rose in 40 out of 150 metropolitan areas. The chief economist for the NAR, Lawrence Yun, explained the gains as signs that the market is stabilizing in areas such as Washington, D.C, San Antonio and Fargo, ND. Although Yun acknowledges that foreclosure sales are artificially depressing home prices in many areas so it is difficult to accurately reflect the true median home sale prices in those areas.
NAR takes the position that we should be doing better with the housing recovery because of historically low mortgage rates and a high affordability index. One of the reasons NAR feels the recovery is much slower than expected even though buying conditions are so favorable is that Banks have tightened their lending guidelines making it much more difficult for even borrowers with high incomes or good credit to get mortgages.
According to the NAR report, distressed homes are selling at least 20% below market value and accounted for about 33% of all second quarter 2011 home sales, which were down 39% from the first quarter 2011. Cash buyers made up 30% of all home buyers during the second quarter, and first time home buyers purchased 35% of the homes. First time buyers made up a significantly less portion of home sales then the same time last year because the home buyer tax credit was driving the market. Repeat buyers made up 56% of the market share, and were up from 40% of all buyers in the second quarter 2010.
The national median existing condo sales price was $169,200 for the second quarter, which was 3.5% below the average during the second quarter 2010. Fourteen metro areas showed increases in their median condo sales prices and 40 showed declines compared to the second quarter 2010
Regionally, home prices rose in the Northeast to a median sales price of $245,600, and the number of sales declined 4.6% compared to the second quarter 2010. For the Midwest, home sales prices fell 5.4% to $139,800, and the number of home sales fell 3.1% compared to the second quarter 2010. For the south, median home sales price fell 2.7% to $153,000 compared to the second quarter 2010. For the West, the median home sales price fell 3.1% to $218,000 from 2010, and the number of home sales dropped 10.8% from 2010.
The NAR’s third quarter report will be released on November 9, 2011.
Future Housing Trends
While NAR has forecasted the current home sales and median home sale prices. A study by the National Association of Builders revealed that the average size of homes will be smaller by 2015, with just 2,152 sq. ft. This is 10% smaller than new homes built in 2010. About 30% of builders say homes will no longer have living rooms or living rooms will merge with other rooms, family rooms will increase in size, and entryways and dining rooms will decrease in size. Also, a majority of homes will have a combination family room and kitchen or kitchen and living room. Master bedrooms in two story homes will be located on the first floor, and all masters will have walk-in closets. Homes will feature a separate laundry room, a two car garage, and there will be more technology homes and green homes with Energy Star ratings.
Happy House Hunting!