The National Association of Realtors reported today that existing-home sales made a small step-up in April. Buyers around the country are taking advantage of foreclosures and snapping up property that carries a large discount.
Home resales rose by 2.9% to a 4.68 million annual rate from 4.55 million in March. The NAR originally reported March sales fell 3.0% to 4.57 million. The April resale level of 4.68 million reported Wednesday by NAR was above Wall Street expectations of a 4.67 million sales rate for previously owned homes.
About 45% of the 4.68 million in April sales were foreclosures and short sales. The large number of these distressed property sales has driven prices lower, year over year. The median price for an existing home last month was $170,200, down 15.4% from $201,300 in April 2008.
In Alameda, we have seen sales increase steadily since January. The month-over-month change between March and April was a 40% increase. The difference between the two months is just 10 sales.
Link to Larger Chart
Distressed property sales, January 1 to May 27, are 28% of the sales the homes sold in Alameda. The short sale or foreclosure sale of Alameda properties recorded on the Multiple Listing Service show that the number is much smaller than the national number, but still significant.
Alameda buyers are now facing two big issues: lack of changing inventory and tighter lending standards. Weak demand has kept Alameda inventories of unsold homes low and unchanging. The inventory has been very static, it appears low priced homes are being snapped up but the weak inventory is depressing prices as buyers wait to see what direction the market will head.
Combine the inventory issue with tighter mortgage lending standards, which have made it harder to finance a purchase and pricing will be continue to be difficult to predict in the near future. The uncertain economic outlook is also hurting the existing-home market as unemployment rate rose to 8.9% in April from 8.5%.
Given California’s budget crisis, and assured job cuts it could be a long dry summer for the home market.
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