The median price of an existing home that sold in April of this year was $177,400,
an increase of just over ten percent from a year ago. That is the
biggest price jump since January of 2006. The difference between now and
then, though, is the 2006 price jump was real, this latest spike is
not.
“This is a mix of home issue,” warned National Association of Realtors
chief economist Lawrence Yun, who usually tries to see the positives in
all housing numbers. “There is an acute inventory shortage in Phoenix,
Las Vegas, Ft. Myers,” Yun explains.
As we reported here on the Realty Check last month,
a lack of distressed supply, that is foreclosures and short sales, is
pushing overall home sales lower. That’s because the majority of the
sales action for the past few years has been on the low end of the
market.
Now, as banks try
to modify more delinquent loans to comply with the recent $25 billion
mortgage servicing settlement, and as investors rush in to buy
distressed properties and take advantage of the hot rental market, the
distressed market is drying up.
The share of home
sales in the $0-250,000 price range made up over 73 percent of all sales
in February; that has already dropped to 67 percent in April.
So what does this
say about where we really are in terms of home prices nationally? The
Realtors still expect overall home prices to rise just 2-3 percent in
2012, which is one of the more bullish predictions. If the banks start
releasing more properties onto the market or push more delinquent loans
to foreclosure, overall home prices will come down again.
The lesson to take
from this report is that all home price changes now are more local and
more price-range specific than ever. The jump in sales of higher priced
homes is a good sign, as some had predicted that when the distress dried
up, there would be no sales.
But overall
inventories of homes for sale, while up for the month, are still way
down from a year ago, and that means sellers are still wary of this
market. Confidence and credit will be key going forward.
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