First time homebuyers taking advantage of foreclosures and short sales
However, even with the newfound interest of first time home buyers, sales were sluggish and prices continued to drop. Of 152 metropolitan statistical areas, 134 reported lower prices. Only 18 had price gains. The national median existing single-family home price was $169,000, which is 13.8 percent below the first quarter of 2008. Distressed homes are typically selling for 20 percent less than traditional homes, which is sending the median price lower.
"Close to 455,000 buyers purchased their first home during the first quarter, and those are likely just the first wave of new buyers coming into the market -- they're critical for a housing recovery," Lawrence Yun, NAR chief economist, said in a press release issued this morning. "Housing affordability conditions are at record high levels and we expect a measurable increase in home sales during the second half of the year."
The largest sales gains were seen in some of the hardest hit areas. Nevada was up 116.8 percent from a year ago. California was up 80.6 percent. Arizona was up 50.2 percent and Florida was up 25 percent.
The biggest increase in median price was seen n the Cumberland area of Maryland and West Virginia where prices increased 21.1 percent from a year ago. There the median price home was $114,900. The next highest jump in prices was seen in Davenport-Moline-Rock Island area of Iowa and Illinois with a increase of 13.8 percent to $100,300. The most affordable homes can be found in Saginaw, Michigan with a median price of $30,300. The highest median price is in Honolulu, at $570,000.
Taking a look at median prices regionally, you'll find the biggest decline in the West, with a drop in prices in the past year of 19.8 to a median price of $237,600. Northeast median prices dropped 15.9 percent to $235,500. The South declined 10.8 percent to $146,600. The Midwest was down 6.8 percent to $132,400.
While we're still seeing prices decline, the good news is that some people are jumping off the sidelines and getting back into the marketplace now that homes are much more affordable. There's still a lot of foreclosures and short sales out there and until that backlog is cleaned out we probably won't see any significant upswing in median prices.
Lita Epstein has written more than 25 books including The 250 Questions You Should Ask About Buying Foreclosures.