Dennis Norman Musings

Dennis Norman

By: Dennis Norman

Today the National Association of REALTORS(R) released its existing home sales report for June showing an increase in sales for the 3rd month in a row and rising prices for the month in all regions of the U.S.

Existing home sales, including single-family, town-homes, condominiums and co-ops increased 3.6% in June to a seasonally adjusted annual rate of 4.89 million units. This rate is almost identical to last years sales at the same time which is a first in a quite a while. May’s rate was down 3.6% from a year ago and June is down just 0.2% from a year ago.

Also for the first time in a while, all four regions of the U.S. had an increase in sales for the month with the West leading the pack with a 6.4% increase followed by the South at 4.9%, Northeast at 2.5% and the Midwest a 0.9%.

Median home prices in the U.S. rose 4% from $174,700 for May to $181,800 for June which is down 15.4% from a year before. This narrows the year-over-year gap from Mays drop of 16.8%. This month all of the four regions in the U.S. saw an increase in median home prices. The Midwest saw a 6.7% increase over May followed by the West at 3.7%, South at 3.6% and the Northeast at 2.1%.

I think the numbers show there is some confidence on the part of home buyers and they are coming off the sidelines. The first time home buyer credit is definitely playing a part in this and investors that can focus on the first-time home-buyer market for resales will no doubt fare better in this market.

Lawrence Yun, NAR Chief Economist

Lawrence Yun, the chief economist for the National Association of REALTORS(R) is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many REALTORS(R) are reporting lost sales as a result of new appraisal standard that went into effect May 1 of this year.”

A June survey of NAR members shows 37% experienced at least one lost sale as a result of the new Home Valuation Code of Conduct (HVCC), with seven out of ten reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85% report a perceived reduction in appraisal quality.