Distressed properties drive home sales up, prices down in 1Q
Existing home sales increased in the first quarter in 49 states and the District of Columbia, driven by a substantial amount of distressed property sales. Only Vermont experienced lower sales volume during the first three months of the year when compared with the fourth quarter. The National Association of Realtors said Tuesday seasonally adjusted sales rose to an annual rate of 5.14 million in the first quarter, up 8.3% from the fourth quarter and down 0.8% from a year earlier when the homebuyer tax credit was in effect. Distressed property sales accounted for 39% of all transactions, up from 36% a year earlier. While this is good news for sales volume, distressed property sales are dragging down prices. In the first quarter, the median existing single-family home price was $158,700, down almost 5% from $166,400 one year ago. The volume of homes that sold for less than $100,000 increased 8.9% compared to the same time period. "The preponderance of sales activity at the lower end is bringing down the median price, so what we’re seeing is the result of a change in the composition of home sales," said Lawrence Yun, chief economist at NAR. "The rising sales trend in nearly all states is a part of the healing process to clear off inventory. Sales need to rise before prices can firm up." Home prices fell during the first quarter in 118 of 153 metropolitan areas tracked by NAR, or 77% of metros nationwide. Prices dropped the most in Gulfport-Biloxi, Miss., down 22.8% to a median $99,400. Charlotte-Gastonia-Concord, N.C.-S.C. witnessed the largest price gain during the quarter, up 12.2% to a median $195,100. Several home prices indices around the country trended downward in the last month of the quarter, causing some experts to call a double-dip. CoreLogic (CLGX) found March home prices down 7.5% from one year ago, marking eighth-straight months of declines. Integrated Asset Services' index fell 3.3% in the first quarter. Zillow reported Monday that more than 28% of single-family homeowners are currently underwater on their mortgage. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.