Sales of existing homes in the fourth quarter of 2009, spurred by an expiring federal tax credit for first-time home buyers and its replacement with a broader credit, rose 13.9% from the previous quarter to a seasonally adjusted rate of 6.03 million, the National Association of Realtors reported Thursday.
The gains over third quarter showed up in 48 states and Washington D.C., with 32 states up in double digits (tables available here). Year-over-year, 49 states and D.C. posted gains, and all but three states were up by double digit percentages. The quarterly data do not break out sales of single-family vs. condos, but Walter Molony, an NAR spokesman, said condo sales have been running recently at only approximately 12% of the total.
Sales in the fourth quarter were up 27.2% from the comparable quarter in 2008. Distressed property accounted for 32% of fourth quarter transactions, down from 37% a year earlier.
Prices, however, were mixed, with the national median existing single-family price at $172,900, 4.1% below the fourth quarter of 2008. While a decline, it was the smallest drop in more than two years. Moreover, 67 of 151 metropolitan statistical areas reported year-over-year gains in median existing single-family home prices, including 16 with double-digit increases. One MSA was unchanged and 84 metros showed price declines. In the third quarter, 30 MSAs showed annual price increases and 123 areas were down.
In the condo sector, covering changes in 54 metro areas, the national median existing-condo price was $177,300 in the fourth quarter, down 4.8% from the fourth quarter of 2008. Eleven metros showed increases in the median condo price from a year earlier and 43 areas had declines; in the third quarter only four metros experienced annual price gains.
Regionally, existing-home sales in the Northeast rose 11.1% in the fourth quarter to a pace of 1.03 million, 33.6% higher than a year before. The median existing single-family home price in the Northeast declined 5.6% to $234,900 in the fourth quarter from the same quarter in 2008. In the Midwest, existing-home sales jumped 14.5% in the fourth quarter to a pace of 1.38 million, 29.9% above a year ago, with the median existing single-family price up 1.1% to $141,100. The South was up 13.8% to a rate of 2.23 million, 28.2% ahead of the 2008 quarter, with the median price down 2.4% to $153,000. The West was up 16.2% to a rate of 1.38, 18.2% above a year before, with the median price down 8.9% to $227,200.
Lawrence Yun, NAR chief economist, said the first-time home buyer tax credit was the dominant factor in the sales gains. "The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates," he said. "With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices."
Rates on conventional 30-year mortgages, per Freddie Mac, averaged 4.92% in the fourth quarter, down from 5.16% in the third quarter and from 5.86% in the fourth quarter of 2008.
"Because buyers are taking on long-term fixed rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price recovery process appears durable," Yun said.