Home Sales Brighter, prices on rise.
Existing-home sales kept up their recovery in July, rising 2.3% as prices jumped 9.4% from a year ago, according to the Charleston Trident Association of Realtors, but the market’s progress disappointed analysts who expected more.
Smaller inventories of homes for sale let sellers push prices higher, the association said. The average price of a new home rose 9.4% to $187,300, aided by a shift in the mix of homes sold, with fewer low-end units included. “I am seeing multiple offers within in first week a nice home comes on market,” Isle of Palms Realtor, James Schiller.
Nationally, the number of homes sold rose to a seasonally adjusted annual rate of 4.47 million. The numbers missed economists’ expectations of about 4.52 million home sales, according to Drew Matus, an economist at investment bank UBS.
“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates,” NAR Chief Economist Lawrence Yun said in a statement. “Combined, these factors are helping to unleash a pent-up demand. However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
Independent economists are looking for the housing market to begin slowly reversing its more than 30% slide in prices, though most do not expect substantive price gains until at least 2013 or 2014.
“It was a little below expectations but still good,” said Mike Zoller, an economist at Moody’s Analytics. He said the sharp gains in prices reflect the smaller percentage of foreclosure-related distress sales included in the numbers, as well as the shift to more higher-end home sales.
Tight credit or worries about jobs may be prompting buyers to stay on the sidelines, said Patrick Newport, an economist at IHS Global Insight. The gain in home sales was the second-smallest reported this year, he added. As long as the buyer has good credit, money to put down, and good job security getting a loan is still easy by most standards.
“These are not great numbers,” Newport said. “We have record-low mortgage rates. Something is going on.”
The economists also disputed the Realtor association’s argument that sales might be stronger if more homes were available.
Nationally, inventories of available homes work out to about six months’ worth of expected sales, Zoller said, a level he called “reasonable.” The proportion of homes that are vacant is still above 2%, Newport said, citing Census data. That’s higher than a historical norm of about 1.7%, he said. Locally, Charleston, SC homes sales appears to be improving as inventory stays lower than normal.
The bright side is that the overhang of foreclosures are finally seeing a decline, relieving an overflow that pushed prices lower, Barclays economist Michael Gapen wrote in a note to clients. About 24% of sales were foreclosure-related, down from 29% last July, he said.
Most Content Courtesy of USA Today
Charleston South Carolina Housing Improves Faster then National Average
If you live in Charleston S.C and are considering selling your home, now is as good time as ever. According to USA Today the Charleston SC area is performing better than the national average.
“Inventories also shrank faster than the national average in Minneapolis; Charleston, S.C.; Seattle; Washington, D.C.; Miami; and parts of Southern California, Zillow says”.
Change from a year ago in the number of homes for sale in May by price tier in 100 top markets: | ||||
Market |
Bottom third
|
Middle third
|
Top third
|
Average
|
Charleston, SC |
-41%
|
-22%
|
2%
|
-20%
|
United States |
-12%
|
-17%
|
-17%
|
-15%
|
It now costs more to rent than to own a home in 98 of the top 100 U.S. metropolitan areas, says real estate website Trulia, which tracks rents and home prices. In some of those markets, however, the inventory of homes for sale has shrunk.
But low interest rates are luring more buyers, as are home prices that are down 35% from their 2006 peak.Nationwide, 35% of existing single-family home buyers in April were first-timers, according to the National Association of Realtors. In healthier times, first timers account for 40% to 45% of the market, says NAR chief economist Lawrence Yun. Tight credit and a still-shaky economy have kept many first-timers out of the housing market, he says.
Rising prices could boost supply
Home inventories have shrunk because fewer foreclosures are coming to market. Many homeowners don’t want to sell, because they don’t have enough equity in their homes. Others are waiting for higher prices.
“They’ve waited out five years of declining prices and don’t want to sell at the bottom,” says Stan Humphries, a Zillow economist. As home prices increase, more sellers will likely emerge, he says, which will add inventory. Or, buyers might back off if the economy softens.
If you are in need of Charleston area real estate advice please feel free to contact me.
James Schiller – Realtor in Charleston, Mount Pleasant, Isle of Palms.