The number of residential property sales in the US is increasing and the trend is sustainable, according to the latest information from the National Association of Realtors. Home prices seem to have eventually turned a corner!
The rate of existing homes sales increased between the first quarter and the second quarter of this year in 39 states in what is regarded as a sign that the recovery in the real estate market will be nationwide.
The seasonally adjusted annual rate of national sales of existing single-family homes and condominiums rose to 4.76 million units in the second quarter, up 3.8% from 4.58 million units in the first quarter of 2009, but still 2.9% lower than the 4.9 million sold in the second quarter of 2008.
‘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,’ said NAR chief economist Lawrence Yun.
The NAR survey shows sustained sales gains in Arizona, Nevada and Florida, three states which have been particularly badly hit by the property crisis. Gains are also significant in Maryland, the District of Columbia and Nebraska.
There are also strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.
Yun pointed out that this will help boost the economy and bring the US out of recession. ‘Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy.
That’s how the housing engine traditionally pulls us out of recession,’ he said.
‘In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy,’ he added.
But median home prices continued to decline in 129 of 155 metropolitan statistical areas between the first and second quarters of 2009. The national median existing single-family home price was $174,100, down 15.6% from the same period in 2008. Distressed sales made up 36% of second quarter transactions.
But NAR president Charles McMillan said there is a silver lining to the continued decline in prices that is increased affordability. ‘Housing affordability is hovering near record highs and there’s a wide selection of homes,’ he said.