It’s a seller’s market

The National Association of Realtors (NAR) has reported that median home prices across the nation continued to increase in the first quarter of this year.

Another finding is that the required income to purchase a median-priced home on a “metropolitan-basis” indicates that an average buyer earns roughly twice the income needed to buy a home in their area. Additionally home prices in metropolitan areas rose the most and posted the largest year-over-year gains. The increase was the biggest registered in more than seven years.

The median existing single-family home price increased in almost 90% of the metropolitan statistical areas based on closings in the first quarter of 2013 as compared to the same period last year. The remaining areas reported price decreases.

According to NAR, the national median closing price for an existing single-family house in the first quarter increased 11.3% when compared to the first quarter of 2012. It is now a seller’s market in many areas.  (The median price is where 50% of homes sold for more and 50% sold for less.) In some markets, the increase in median prices is because of the smaller number of less expensive homes available for sale and increasing homes sales in the higher-priced homes.

Foreclosures and short sales accounted for 23% of the market, as opposed to 32% a year ago. These distressed properties sold at discounts up to 20%.

Builders are scrambling to buy land and build homes to meet the increasing demand.

At the end of the first quarter of this year, there were almost two million existing homes available for sale as compared to 2.32 million for the same period last year. This represents a 16.8% decrease in inventory.

The largest gain in home prices was reported in Akron, Ohio, followed by the San Francisco-Oakland-Fremont, Calif., area, Reno-Sparks, Nev., the Silicon Valley/San Jose area in California, Atlanta, Ga., and Phoenix, Ariz. Prices fell in areas of Illinois, New Jersey and Pennsylvania.

In Connecticut, however, new foreclosures hit a three-year peak in April. Cases in the early stages of foreclosure accounted for the spike. In contrast, RealtyTrac reported that national foreclosures decreased to the lowest level since February 2007. This is being attributed to 165,000 jobs being added to the economy in April nationwide.

Unfortunately, Connecticut has lagged the country with the creation of jobs. Home prices increased almost 3% in Connecticut in April. If you adjust sales by removing distressed properties, home sales in Connecticut have increased 6.5%, according to CoreLogic.

According to RealtyTrac, approximately 15% of Connecticut homeowners owe more than what their home is worth. With prices increasing, homeowners increase their equity, enabling them to refinance their mortgages or sell.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]      

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