May 22, 2012 at 1:25 PM ET
A spring growth spurt continues to bloom in the housing market.
Existing-home sales rose 3.4 percent from March to April with tight supplies in markets like Miami helping to seed the rejuvenation, according to National Association of Realtors data released today.
Year over year, home sales were 10 percent higher in April while median home prices touched $177,400, a 10.1 percent spike from April 2011, the NAR said.
Of course, huge chunks of the housing market will appear sunnier when compared to the soggy early months of 2011 when, in cities like Miami, “things were pretty rotten,” said Rich Green, an agent with Coldwell Banker Residential Real Estate in Coral Gables, Fla.
“But, yeah, April was a pretty strong month here,” Green said. In Miami, the median sales price of existing homes reached $182,000 during the first quarter of 2012 compared to $166,000 during the same quarter last year. “The activity I’m getting off of 'sign calls' alone has maybe quadrupled. I’ve been doing this for 39 years so I could call that a good sign. I’m cautiously optimistic.”
As is Joel Naroff, a housing-market expert who heads Naroff Economic Advisors in Holland, Pa. Again, this is all about perspective --and how far sales still must climb to regain their full, former vigor, he said. Existing homes were sold at an annual rate of 4.6 million in April, compared with 4.2 million in April 2011.
“That level is still way below where we need to have a healthy housing market,” Naroff said. “But it’s indicating a steady improvement. And the improvement now seems to be set -- it doesn't look like it’s questionable anymore.”
Naroff said as median home prices creep higher, that will start to ignite the big question for scores of buyers: Is this the right time to buy? As prices begin to firm and that information filters down to buyers, the "fence-sitters" will be enticed to make offers as well, especially with mortgage rates hovering near record lows.
“So you do have a situation where with improving sales and improving prices, the market is turning,” Naroff added.
Local rough patches remain scattered throughout the country. Stubborn price declines continue to dog sellers in places like Kingston, N.Y. (where median sales prices of existing homes fell 22 percent in the first quarter of 2012 compared to that quarter in 2011), Mobile, Ala. (down 14.7 percent), Jacksonville, Fla. (down 10.7 percent) and Atlanta (down 12 percent), according to NAR data.
A large overhang of homes in foreclosure or in danger of foreclosure are still sandbagging the market in many cities. Foreclosures and short sales (homes sold for less than what is owed on the owner's mortgage) comprised 28 percent of the April sales (17 percent were foreclosures and 11 percent were short sales). But that was down from 29 percent in March and 37 percent in April 2011, said the NAR, where analysts also contend that a "diminishing share of foreclosed property sales is helping home values."
NAR cited Seattle, Phoenix, Washington, D.C., and Orange County, Calif., as places where tight housing inventories are leading to "multiple biddings and escalating price conditions."
In Atlanta, buyers are equally frustrated by an airtight inventory of nicer homes in better neighborhoods, especially in that city’s northern suburbs, said Kent Gipson, a Realtor with Keller Williams Realty First Atlanta.
“We have these same properties that people have been trying to sell for two to three years -- the usual suspects,” Gipson said, referring to less-desirable homes with no backyards, nearby highways or stucco walls.
“There’s a lack of good inventory here, and after four years of low interest rates, many homeowners have leveraged themselves so they can’t sell at market value,” Gipson said. “People either can’t afford to sell or they aren’t willing to sell because they keep hearing the market is taking a beating.”
Mortgage rates have recently hit record lows, with the 30-year benchmark under 3.8 percent.
The median sales price for Atlanta homes dipped to $87,800 in the first quarter of 2012 compared to $99,800 during that same span one year ago, the NAR reported.
One of Gipson’s buyers has been hunting for his next Atlanta home for three years. He recently fell in love with a dwelling north of Atlanta’s downtown that was listed at $370,000.
The home grabbed 46 offers in two days. Gipson’s buyer bid $500,000 and didn’t make the cut.
“It was,” Gipson said, “a riot scene out at that place.”