Existing home sales pick up in second quarter
Existing home sales rose 3.8 percent in the second quarter, a report released Wednesday showed, as lower home prices and government tax breaks pushed many would-be home-buyers off the fence and into the real-estate market.
In the three months ending June 30, sales of single-family homes and condominiums across the country rose 3.8 percent to 4.8 million, compared to the first quarter of the year when 4.6 million were sold, according to the report issued by the National Association of Realtors.
Though welcome news, the report noted that the sales pace remained below that of the comparable quarter last year, when 4.9 million units were sold, suggesting that the recession and increased unemployment has dampened demand.
Idaho recorded the largest sales gain from the first to second quarters, up 67.5 percent; followed by Hawaii, which rose 24.2 percent; New York, up 22.3 percent, Wisconsin, gaining 21.7 percent; and Nebraska with a 20.3 percent increase. Twelve other states experienced double-digit sales increases from the first quarter, the report said.
The sales gain appears to be sustainable, said Lawrence Yun, the organization's chief economist. For example, 13 states in recent weeks have reported double-digit increases, in Northeast states, including New York and New Jersey, and those in the Midwest and the Intermountain West.
"With low interest rates, lower home prices and a first-time buyer tax credit, we've been seeing healthy increases in home sales, which are a hopeful sign for the economy," Yun said.
Still, those states hard hit by the housing bubble -- California and Michigan -- as well as Minnesota, saw sales drop in the second quarter compared to the first quarter of the year. But that trend wasn't universal. Other hard-hit states, including Arizona, Nevada and Florida, saw gains in the second quarter compared to the first.
As sales increased, so did home prices. The report showed the largest gains in singly-family home prices occurred in the Quad Cities area of Illinois and Iowa, where home prices jumped 30.6 percent from a year ago to a median price of $113,200. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of last year, followed by Elmira, New York, where the median price increased 11.3 percent to $85,000.
"The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona and Nevada, where distressed homes comprise many of the transactions," Yun said.
Honolulu, perennially among the nation's most expensive housing markets, recorded the highest median single-family home price at $569,500, followed by the San Jose-Sunnyvale-Santa Clara area of California, at $500,000, and San Francisco-Oakland-Fremont at $472,900.
The nation's most affordable housing market could be found in Saginaw, Michigan, where the median price was $55,700, the report said.