March 2010 Home Sales Report

According to the National Association of Realtors spring home sales showed an unexpected surge as result of the home buyer tax credit, which expired on April 30, 2010. Data released by the NAR reflects that existing home sales rose 6.8% to an annual rate of 5.35 million units in March from 5.01 million in February 2010, and are 16.1% above the 4.61 million levels in March 2009. Lawrence Yun, the Chief Economist for the NAR, reported that sales have been above year to year levels for nine months straight and inventory is down. End of March inventory was at an 8.0 month supply down from an 8.5 month supply in February 2010. Foreclosures are selling quite quickly in the lower price ranges because they are attractive to first time home buyers and investors. 44% of the homes purchased in March 2010 were from first time home buyers. That was up from 42% in February 2010. Investors purchased 19% of all transactions as of the end of March, which was unchanged from February 2010. The remainder of the sales were from repeat buyers. All cash sales represented 27% of all sales.

Median existing home sales across the nation were $170,700 for March 2010, up 0.4% from March 2009. Distressed homes accounted for 35% of all March 2010 sales, unchanged from February. Home sales are stabilizing. Low interest rates and affordable housing should help to continue home sales as buyers/investors feel more confident investing in the real market right now. According to Freddie Mac, the national average 30 year conventionalfixed-rate mortgage fell to 4.97% in March from 4.99% in February. This is lower than the average rate of 5.00% rate in March 2009.

14 out of 20 metropolitan areas saw median price rise compared to a year ago. San Diego, St. Louis and Boston saw double digit increases. Condo sales also saw an increase of 3.1% in March 2010 from February 2010. The median condo price was $170,600 in March, which is 0.7% below a year ago.

Regional Home Sales

The median price in the Northeast was $249,800, up 8.9% from March 2009.
The median price in the Midwest was $139,300, up 0.2% from March 2009.
The median price in the South was $154,800, up 5.2% from March 2009.
The median price in the West was $209,400, down 7.9% from March 2009.

New HAMP and HAFA Guidelines

With the government’s new guidelines for HAMP and HAFA, it is expected that foreclosures will slow down while homeowners try and work out loan modifications and forbearance programs with their lenders as well as complete short sale transactions. The government incentives to loan servicers and borrowers to participate in a short sale transaction under the HAFA program should also shorten the length of time it takes to get approval from the loan servicer or lender. More buyers will be able to close on short sale transactions if they are part of the HAFA program. This is good news for everyone. The NAR had been pushing for legislation that would help move the short sale process along quicker for quite some time now. The reason short sales have not been very successful is that they take too long to get approved by the seller’s lender, and buyers walk away.

Home sales are stabilizing in most of the country so we will just have to wait and see what happens the third quarter of 2010. For the most part the news is good.