Realtors Say Home Prices Took Another Hit

San Antonio, Texas

Median existing-home prices declined modestly in the second quarter with 27 percent of metropolitan areas experiencing price gains from a year ago, while state home sales declined from the second quarter of 2010, according to the latest quarterly report by the National Association of Realtors.

The median existing single-family home price rose in 41 out of 151 metropolitan statistical areas1 (MSAs) in the second quarter from the same period in 2010, including four with double-digit increases; one was unchanged and 109 areas showed price declines. In the first quarter, 34 metro areas had posted gains from a year earlier.

Lawrence Yun, NAR chief economist, said home prices have been moderating. “Median home prices have been moving up and down in a relatively narrow range in many markets, which shows a stabilization trend,” he said. “Markets showing consistent price stability or increases are those with solid labor market conditions, such as in Washington, D.C.; San Antonio; or Fargo, N.D.”

Yun noted the median price measurement reflects the types of homes that are selling during the quarter and can be misleading at times. “The level of foreclosures, which can artificially depress median prices, can vary notably in given markets. The annual price gauge smoothes out the quarterly swings and has shown fairly stable price trends in most markets.”

He added the housing market should be stronger. “With home prices in a broad trough and historically low mortgage interest rates, high housing affordability conditions and rising rents could stimulate a more rapid sales recovery if banks get back into the business of lending to more creditworthy borrowers,” Yun said.

NAR’s Housing Affordability Index stood at 176.6 in the second quarter, the third highest on record after the first quarter of 2011 and fourth quarter of 2010. The index measures the relationship between median home price, median family income and mortgage interest rates; the higher the index, the greater household purchasing power. Record keeping began in 1970.

The national median existing single-family home price was $171,900 in the second quarter, down 2.8 percent from $176,800 in the second quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes,2 typically sold at a discount of about 20 percent, accounted for 33 percent of second quarter sales, down from 39 percent in the first quarter; they were 32 percent a year earlier.

Total state existing-home sales, including single-family and condo, declined 5.4 percent to a seasonally adjusted annual rate3 of 4.86 million in the second quarter from 5.14 million in the first quarter, and were 12.7 percent below a 5.57 million pace during the second quarter of 2010. June 2010 was the closing deadline for the home buyer tax credit.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the key to healthy housing is credit access. “It’s frustrating for many creditworthy potential home buyers to realize that when they’re ready to make a move, banks remain risk averse,” he said. “People with good jobs, long-term plans and who are willing to stay well within their means deserve an opportunity to realize their American dream of home ownership. When banks return to normal and safe but sensible lending standards, housing will be able to contribute its traditional share to economic growth.”

Yun clarified the point on economic growth. “The direction of the economy will be determined principally by the housing market recovery, and indications now are pointing toward only a modest recovery,” he said.

The share of all-cash home purchases was 30 percent in the second quarter, up from 25 percent in the second quarter of 2010. Investors, who make up the bulk of cash purchasers, accounted for 19 percent of second quarter transactions, up from 14 percent a year ago.

First-time buyers purchased 35 percent of homes, down from 46 percent in the second quarter of 2010. Repeat buyers accounted for a 56 percent market share in the second quarter, up from 40 percent a year earlier.

In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $169,200 in the second quarter, which is 3.5 percent below the second quarter of 2010. Fourteen metros showed increases in the median condo price from a year ago and 40 areas had declines.

Regionally, the median existing single-family home price in the Northeast rose 2.0 percent to $245,600 in the second quarter from a year ago. Existing-home sales in the Northeast declined 4.6 percent in the second quarter to a level of 763,000 and are 19.9 percent below the second quarter of 2010.

The median existing single-family home price in the Midwest fell 5.4 percent to $139,800 in the second quarter from the same period in 2010. Existing-home sales in the Midwest were down 3.1 percent in the second quarter to a pace of 1.05 million and are 18.3 percent below a year ago.

In the South, the median existing single-family home price declined 2.7 percent to $153,000 in the second quarter from a year earlier. Existing-home sales in the South fell 3.4 percent in the second quarter to an annual rate of 1.89 million and are 9.9 percent below the second quarter of 2010.

The median existing single-family home price in the West declined 3.1 percent to $218,000 in the second quarter from the second quarter of 2010. Existing-home sales in the West dropped 10.8 percent in the second quarter to a level of 1.16 million and are 6.2 percent below a year ago.

Another Downside to the One Story Town

One of the things I've noticed at my new place in Dallas is the pain in my leg muscles. I'm finding the difference between living in a one-story home in suburbia and a three level condo in the city is this unwitting exercise.

One-floor living has its appeal, and certainly such real estate is also available in the city, primarily in high-rise buildings. With one floor, everything is pretty accessible. Leave your keys or wallet on the third floor and you'll discover how convenient one-floor living was.

But there's also this notion of exercise. We hear a lot about how living in a dense urban environment with amenities accessible by walking is good for the waist line and for health, but what about living where you're forced to go up and down stairs on a regular basis? I do remember reading somewhere that every flight of stairs climbed adds the time it takes to climb them to your life span.

Okay, so what if you are spending the extra time climbing stairs?

The notion of aging in place has also entered my stream of thought on this. Working in real estate, I've gone into many homes where you can see through the furnishings and objects how the physical range has gotten smaller and smaller as time went on. On one hand, choosing to live on a single level can insure the ability to stay in a home longer as we age, but what if those stairs keep us healthy longer?

Which is better, staying somewhere longer or staying healthy longer?

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What Can You Get for Less than $100K in Oak Lawn?

Owning property is often very affordable if you're expectations aren't too high. This doesn't mean you have to live with broken faucets, pealing paint and cold water, or take life into your own hands walking to the bus stop (although you need to be alert everywhere).

More and more Americans are learning to live small. How much space do you actually use anyway? Why pay to heat space you never go into? When you figure out costs for things like and extra bedroom for guests or space to entertain, its often much more advantageous cost-wise to get a hotel room a couple times a year or rent a party space than it is to pay a mortgage on space you don't use.

Right now there's a 579 square foot one bedroom condo in Oak Lawn near Wycliff and Dickason for just $38,000. That's just $66 a square foot and about $233 a month plus HOA fee. That's likely to represent a substantial savings over renting.

Another condo at 4340 Cedar Springs Road is offered at $55,000. It's a little bigger at 714 square feet, which is actually on the large side for a one bedroom in Brooklyn or Manhattan. It's near Cedar Springs and Wycliff.

Closer to the top of our range, there's a unit at 3883 Turtle Creek Boulevard advertised for $99,000 with 783 square feet. This building is a high-rise and may have higher HOA fees, but its pretty remarkable that you can get into a Turtle Creek property for less than $100K.

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Cities Boom as Boomers Fade

It wasn't driven by a Baby Boomer, but recently when the window of a Cadillac SUV came down and a voice asked me to move my Honda Fit so she could fit into a parking spot, I had to think this was the remnant of a fading world.

It's been clear for some time that Baby Boomers reaching retirement age are transforming--and will continue to transform--America's cities. Over the past decades many downtowns have been remade into more lively districts with condos for baby boomers. I remember back in graduate school when it was suggested the farthest ring of suburbs will eventually move in instead of out, to downtown, in the "donut."

And so it happened. Unable to move even farther from the city center and no longer needing more space, the movers began to populate the downtown. This is especially attractive since the aging and childless baby boomers now doing the moving don't need the big McMansions built not long ago.

A look at recent census data adds to the other side revealing that since 2000, the number of poor people in the suburbs jumped by 37.4 percent to 13.7 million. That's more than double the increase in cities, of 16.7 percent.

Bring to this discussion a recent read of mine called The Age Curve by Kenneth Gronbach, and we can get our arms around the bigger picture of how changing demographic will impact development patterns, among other things. 

READ MORE AT THE NEW COLONIST

A $225,000 Manhattan Condo? For Real?

It appears so. Every so often you see a listing like this one. If you're used to the space in Dallas, New York units are generally going to feel small. This one doesn't even list the square feet. But hey, it's in Gramercy Park. It even comes with bike storage. Location, location, location. Keep in mind there are many available in Dallas for less that $100,000 and well under $100 a square foot.