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Silver Lining: Home sales, prices fell in March but low mortgage rates and tax credit drive interest
AP Photo
The largest declines in sales of existing homes in the South were in Jackson, Miss., Richmond and Charlotte.
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Published: April 24, 2009
MIAMI - Sales of existing-homes in the South fell 8 percent in March, compared with the year before, while prices also continued to drop as sellers competed with distressed property sales and lured first-time home buyers, the National Association of Realtors said yesterday.
The median sales price of an existing home in the South sank 12 percent to $146,900, the Realtors group said, a sign that foreclosures still are dragging down prices as banks price the homes cheaply to reduce inventory.
On a national, non-seasonally adjusted basis, existing-home sales dropped 4 percent from March of last year, while the median sales price slid 12 percent to $175,200, the Realtors reported.
However, there were positive signs in the Southern housing market as low mortgage rates and a new $8,000 tax credit for first-time buyers spurred buyer interest. The drop in March sales on a year-over-year basis was half the rate of decline of 16 percent seen in January and February.
"Buyer traffic has been rising, and real-estate offices are getting phone inquires about the tax credit," said Lawrence Yun, the Realtors' group chief economist.
Compared with March of last year, sales of existing homes in the South were down in 16 metro areas covered by The Associated Press-Re/Max Housing Report released yesterday. The largest declines were seen in Jackson, Miss., Richmond and Charlotte.
However, four metro areas that led the housing market downturn have reached the bottom in terms of sales and are now showing signs of rebounding. The Florida cities of Miami, Orlando and Tampa again saw sales increases, as did the District of Columbia, the AP-Re/Max report showed.
Locally, details of the Triad's existing-home sales in March were unavailable yesterday but are expected to be released in several days.
Median sales prices rose slightly in just two of 20 metro areas covered by the AP-Re/Max report -- about 1 percent in Tulsa, Okla., and 3 percent in Jackson. March represented the third straight month of price increases for Tulsa and the second for Jackson.
The AP-Re/Max report analyzes all home sales recorded by all real-estate agents, regardless of company affiliation, in those metropolitan statistical areas.
In Houston, sales fell 21 percent in March, compared with the year before, while median sales prices slid 4 percent to $146,000, the AP-Re/Max report showed.
However, the Houston Association of Realtors noted that both the sales and price declines eased in March compared to previous months.
"It's too soon to predict exactly when the Houston real-estate market will be in healthier territory, but the recent moderation in sales and pricing trends is an encouraging sign," said Vicki Fullerton, a broker at Re/Max of The Woodlands & Spring in the Houston area.
Potential buyer Adrian Aguilar has seen competition among buyers as he searches for a house "inside the loop" in Houston. A first-time buyer who is getting married in September, Aguilar has prequalified for a mortgage and is looking in the $250,000 range. He hopes to take advantage of the $8,000 tax credit.
"We went into this thinking it is a buyer's market," said Aguilar, 30. "But we noticed that the properties we were looking at and liking, in week one they were put up for sale, and in week two they already have a contract on them."
Lower prices are a big reason why buyer interest is increasing. About a quarter of listings in Houston, Miami and Atlanta had their prices reduced as of April 13, with Miami sellers cutting an average of 15 percent off their original price, according to Trulia.com.
Paula Barrera, a real-estate agent in Miami, said she has seen more buyer activity -- on the phone and at open houses -- in March and April. The more savvy buyers first ask if a home is a foreclosure or short sale, hoping to take taking advantage of reduced prices.
A short sale is when the seller owes more than the house is worth, and the lender is willing to take the loss to exit the investment.
"A property that's priced kind of average gets nothing," said Barrera, an agent with EWM in Miami. "For foreclosures, the phone does not stop. When I talk to a seller, I tell them, ‘You have to compete.'"
Buyers in some working-class Miami neighborhoods have to "put an offer in immediately" if they like a property because of price competition, Barrera said.
Jorge Martinez, 32, and his wife looked at a three-bedroom house in Miami on Sunday. Although they are in the market to buy their first house, they are not in a hurry because they are living with a relative. But they see this as a prime buying opportunity.
"The prices keep going down, and the $8,000 (tax credit), that really helps," said Martinez, a truck driver. "We want to invest while the market is down."
Like Miami, the District of Columbia has seen a sales turnaround from last year. Sales of existing homes rose 7 percent in March, though the median sales price did fall 21 percent to $275,000, the AP-Re/Max report showed.
While such negative forces as tight lending guidelines are still at play, Donna Evers, a D.C.-area real-estate agent, said that the effect of foreclosures seems to be diminishing in such places as Fairfax County, Va., which has just a 31/2-month supply of houses for sale.
In Richmond, the most active market is for houses less than $300,000, while higher-priced houses are moving more slowly because of high interest rates on "jumbo loans," said Wayne Johnson, a real-estate agent with Coldwell Banker.
Sales in Richmond fell 38 percent, compared with March 2008, while median sales prices dropped 12 percent to $197,000, the AP-Re/Max report showed
Johnson said he has seen more interest in March and April, partly from younger buyers.
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