Where More People Are Buying Homes This Spring, for More Money
Where More People Are Buying Homes This Spring, for More Money
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Buyers frustrated by the lack of homes on the market as of late snapped up more existing homes last month—particularly in the Northeast, according to a recent report from the National Association of Realtors®.
Sales of existing homes, as opposed to newly constructed residences that have never been lived in, rose 5.1% in March from the previous month and 1.5% from the same time last year. Buyers closed on about 5.33 million of the single-family abodes, townhouses, co-ops, and condominiums last month, according to the seasonally adjusted numbers in the report.
House hunters have “a sense of urgency,” says realtor.com®’s chief economist, Jonathan Smoke.
“There are a really good number of today’s buyers who tried to buy in 2015 who weren’t successful because they couldn’t find a home or they were outbid,” he says.“They took a rest during the holidays and then hit the market early this year.”
Low interest rates on mortgages are also spurring aspiring homeowners to action, since the cheaper rates mean they can afford to shell out more on a home, he says. And March seems to be a busier time for home sales, which tend to peak in the late spring through the summer.
But only roughly a third of those signing on the dotted line were first-time buyers—a fact that economists blamed on the dearth of affordable homes on the market.
The median price of an existing home was $222,700 in March—a 5.7% hike from a year earlier, according to the report. The homes also tended to stay on the market for fewer days—just 47—compared to 59 in February and 52 days in March 2015. Whoosh! Ka-ching! Those figures are music to sellers’ ears.
“However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures,” warned NAR’s chief economist, Lawrence Yun, in a statement. “Additionally, a segment of would-be buyers at the upper end of the market appear to have been spooked by January’s stock market correction.”
The Northeast saw the biggest jump in existing home sales, shooting up 7.7% year-over-year, with 700,000 residences sold, according to the report. The median price of the homes was $254,100, a 5.8% bump over the same time last year.
That may be because the Northeast hasn’t recovered from the housing crisis as quickly as the rest of the nation—and is now playing catch-up.
“Because our population is low and we don’t have any strong job draws, we’re on the outskirts of the recovery,” says Burlington, VT-based real estate broker Nancy Jenkins, who runs her own firm.
But sales—and prices—have begun picking up.
“There are fewer homes on the market,” especially close to Burlington,” Jenkins says. “We’re seeing price competition and bidding wars in the lower prices.”
Homes are now going for about 5% more than they did last year, she says. However, she adds, in the luxury sector, prices are still down about 5% from their peak in 2006 and 2007.
Southern states saw a much more modest hike (when compared to the Northeast), of just 2.3% more existing homes sold year-over-year, according to the report. Buyers scooped up 2.25 million residences in March. The median home price was $194,400, a 4.6% bump from the same time last year.
Meanwhile, sales in the Midwest slowed to an increase of just 0.8% in March from the previous year, with 1.23 million homes sold. The median price of homes in the region was $174,800, up 7% from last year.
In the West, which includes uber-expensive Silicon Valley, annual sales dipped 2.5% to 1.15 million homes sold, according to the report. That could be due to the highest-in-the-nation median home price: $320,800. That includes a 5.9% rise from a year earlier.
But it’s not all bleak for buyers in the West. The Phoenix, AZ, market could soon go from a seller’s to a buyer’s market as more existing—and newly constructed—homes go up for sale, says local real estate agent Monica Pendrick, at Keller Williams Realty Biltmore Partners.
Prices have been increasing about 5% annually, but sales have started to slow. She expects that will pick back up in the busier, summer months.
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