Home Price Plunge Produces Sales Spikes In Many Cities

The correlation seems pretty obvious: Price declines in a city = much higher sales. Price maintenance or gain = lower sales. But from the excerpts below, we can see it's actually happening. Foreclosures appear to be the principle reason for dramatic price declines nationwide. But there's no denying that the hardest-hit cities in Florida, California and Nevada are staging sales rallies as prices fall and houses become affordable again.

In fact, price declines and rising sales are being reported all over the U.S., and flat prices or gains are causing declining sales. The NAR reported both sales and price declines all over the U.S. So will the S&P Case/Schiller report coming out this week show a new trend is emerging?

Quote of the Day

"Buyers are coming in with offers that are significantly less than the list price. They're asking for seller concessions, and they're expecting to get both. Historically, we have not priced real estate in Des Moines to accommodate that kind of buyer mentality." - Kurt Schade, president-elect of the Des Moines Area Association of Realtors. The National Association of Realtors said Des Moines, Iowa was one of the few U.S. cities to post home price gains in Q3. House sales, however, declined nearly 17% during that period. (Des Moines Register, Nov. 21)

House Price/Sales Data

Home Prices, Sales Fall. Springfield, Mass.: Realtors association: The median price for a single-family home in Pioneer Valley was $197,000, 8.4% lower than the $215,000 median price recorded in October 2007… The number of homes sold was 366 last month, 8.3% lower than 399 homes sold in October 2007. Realtors Assn president Donald E. Thompson: The sales numbers were actually pretty strong, especially in Hampden County, where 266 homes were sold last month - two fewer than were sold in October 2007: "That's all the mortgage-foreclosed properties coming back on the market.” (Mass Live, Nov. 22)

Brown County Housing Market Remains Stable. Wisconsin: Brown County saw third quarter median home sales increase from $150,800 in 2007 to $151,700, a 0.6% increase. The number of Brown County home sales declined 1.9% from 702 in 2007 to 689 in 2008. At the same time, home sales in the Northeast Region of the state dropped 12%, the state 16.7%, the Midwest 10.6% and entire U.S. 7.7%.” (Green Bay Press Gazette, Nov. 22)

Home Prices In California Down 40 Percent. MDA DataQuick: The median sales price for homes in Southern California fell to $300,000 in October, a level not seen since 2003 and a 41% drop from the peak price set in the spring and summer of 2007. Prices were dragged down by the large number of foreclosed homes on the market… Repossessed properties in October accounted for more than half of residences sold. Low prices did drive sales up 56% from a year ago.” (Seattle Times, Nov. 22)

Norcal Median Home Price Plummets 41%. “Despite an increasingly uncertain economy, thousands of homebuyers around San Francisco Bay kept snatching up foreclosed homes last month, dragging down the median home price by 41% from a year ago, a real estate tracking firm said Thursday.” (San Diego Source, Nov. 21)

California Realtors Report Shows Jump In Home Affordability. “Housing affordability more than doubled in California in the past year. The California Association of Realtors said the percentage of households that could afford to buy an entry-level home in the state rose to 53% in Q308, compared with 24% for Q307.” (San Jose Business Journal, Nov. 20)

3Q Home Sales Up, Values Fall. “Florida Association of Realtors: The Orlando area reported 4,689 existing single-family home sales in Q308, a 17% jump when compared with the 4,005 sales in Q307. Median home prices, however, fell to $198,200 in Q3, a 20% decline from the $247,700 reported in Q307… The Orlando market saw a continued drop in existing condo sales and values.” (Orlando Business Journal, Nov. 21)

Washoe County Foreclosures Boosts Home Sales. Reno, Nev.: “Reno/Sparks Association of Realtors: Existing home sales jumped 47% in Washoe County last month as foreclosures continued to push prices down. The median sales price of an existing single-family home dropped 22% to $274,000 in Reno in October compared to October 2007, a 7% decline from September… [The association] estimated that more than half of all sales last month were bank-owned homes.”  (Mercury News, Nov. 21)

Home Sales, Prices Still Down In R.I. “Rhode Island Association of Realtors: Sales volume and median price of single family homes and condominiums dropped y/o/y in Q308. In contrast, the number of multi-family properties sold increased, spurred by sharply falling prices… The fact that sales increased markedly at the end of Q3 is a good sign for Rhode Island," said Paul Leys, RIAR president… September statistics showed sales of single family homes up 6.4% from September 2007 and pending sales-those under contract but not yet closed — up 26.3%.” (New England Business Bulletin, Nov. 21) 

Report Reveals Real Estate Hot Spots. Springdale, Arkansas: Mountdata.com: Despite record numbers of foreclosures and lower property values in recent months, Benton County contains four of the top five most active real estate markets in the region with respect to home sales. Leading the way was the 72712 ZIP code, with 192 sales in the third quarter and a median sales price of $179,500, down from $197,000 at the end of 2007. [Local] real estate professionals: The city has national name recognition for people relocating to Northwest Arkansas, particularly those courted by Wal-Mart and its vendor community.” (The Morning News, Nov. 21)

County Feels Housing Pain. St. Charles, Missouri: “The number of foreclosures reported in the county has increased nearly 180% from four years ago… Through September, 1,068 permits for single-family homes had been issued, as compared to 2,121 permits for the same nine months of 2007… Karen Vennard of the St. Charles County Assn. of Realtors: “[Sales] are down a little bit from this time last year, but we’re holding pretty steady.” (St. Charles Business Journal, Nov. 21)

Home Sales In Garco Lowest Since ’04. Colorado: Home sales are at their lowest since March 2004. Despite months of sluggish sales, though, prices hadn’t been dropping much. October marked the first time all year that average home prices in every town in Garfield County dropped below year-to-date prices, an indication that prices weren’t just leveling, but falling… The number of transactions plunged 58%, to 95, by far the lowest month of the year.” (Aspen Daily News, Nov. 21)

Pittsburgh Area Home Sales Drop Again In October. “Real estate information company RealSTATs: October [saw] the 19th consecutive month of declining sales activity in the Pittsburgh, Pennsylvania region. [There were] 12.1% fewer sales than in October 2007. All five counties in the region saw declining sales figures. Median homes prices have remained steady in the region with a modest jump from $115,000 in October 2007 to $116,000 last month.” (Pittsburgh Business Times, Nov. 21)

Austin Home Sales Fall In October. Texas: “Austin Board of Realtors: Single-family home sales in the Austin area fell 25% in October compared with October 2007, and October’s active listings rose 5% from the same time last year… Median home price in October rose, however, to $192,520, a 7% increase from a year ago and a record for the month.” (Austin Business Journal, Nov. 20)

Des Moines Bucks Trend, Sees Home Price Rise. Iowa: “National Association of Realtors: The Des Moines metropolitan area was one of 28 areas nationwide to see its median home sale prices climb in Q3, squeaking 1% higher to $155,400... Sales of Iowa's existing homes for Q3 fell 16%, more than double the national decline.” (Des Moines Register, Nov. 19)

Median Home Prices Drop In Most Markets. “NAR: Home prices fell in a record 80% of US cities in Q3 as foreclosures flooded the market and signs of decline spread nationwide. Among 152 metropolitan areas included in a survey, 120 posted declines in median home sales prices, compared with a year earlier. Nationally, sales fell by almost 8% in Q308, compared with Q307. Sales of real estate in foreclosure and other distressed properties made up about 40% of transactions in the quarter, bringing down the median price by 9% to $200,500 from Q307. Sales fell in all but four states in the realtors' report: Nevada, California, Arizona, and Virginia. In those states, buyers have been able to snap up foreclosed homes at bargain prices.” (AP via Boston.com, Nov. 19) 

Fla. Home Sales Up, Prices Remain Down. Florida Association of Realtors: Sales of existing single-family homes in Fort Lauderdale were up 20%... in Q307. However, the median sales price was down 24%, to $277,900, from $364,400. Miami reported a 2% increase… during Q307. Median prices tumbled 24%, to $287,300, from $380,400. The West Palm Beach-Boca Raton market saw a 9% increase in sales of existing homes… The median price there was down 18%, to $300,200, from $365,400… In Miami, condo sales were down 5%... Median prices were down 19%, to $219,800, from $272,000.” (South Florida Business Journal, Nov. 18)

 

Comments

[otbricki:]

Shocking that the supply and demand theory works. Who would have thunk it.

Now we need more of it. A housing recovery is needed for economic recovery. It is always like that.

2008 Nov 23 08:05 PM

[CLH:]

And to think that the gov. is trying to hold prices up. Dumb. The gov. is the problem not the solution.

2008 Nov 23 10:23 PM

[Donald Johnson:]

Markets work! Keep the govt. out and the over supply will take care of itself as long as buyers can get mortgages. Great for people looking for affordable housing. Horrible for a lot of sellers, including the banks.

Good roundup even tho too many of the stories quoted Realtors who always hype and inflate their reports on prices and sales activities.

2008 Nov 23 10:50 PM

[Jackson Cash:]

Agree with the premise of keeping government out.

Problem is the government isn't trying to fix any problem, its redistributing wealth from the competent into the elite hands of the incompetent already rich.

If you're not pissed your children/grandchildren will be.

Duh.

2008 Nov 23 11:59 PM

[Realista:]

OVER 50 % of Home Sales....Are "in Lieu" givebacks, "Short Sales" by Owners underwater on mortgages, Bank REO Disposals, Auction, and Foreclosure SALES!

Realtors Shill Yun, Mortgage Brokers, and Defaulted mortgage Lenders...
All Want Public To Believe...

"IT's A GOOD TIME TA BUY"!

2008 Nov 24 10:27 AM

[billddrummer:]

Hi Judy,

Great compilation, thanks for keeping track.

Here in Northern NV, foreclosures were up in October, the median sales price fell 7% (in one month!), and there's a 7 year supply of homes over $1 million--an infinite supply over $2 million.

Median price/s.f. fell to $126/s.f. for existing homes marketing through the MLS. That's less than it costs to build by about $15/s.f.

Demand for new homes is drying up as the existing home market continues to drop.

It may become economically unfeasible for builders to start new subdivisions, since they won't be earning near enough to justify their investment, or even to recover what they spend on land, permitting, etc.

I'm looking for new building permits to fall further, as developers exit the market.

ATB,

Bill

2008 Nov 24 05:28 PM

[WAKEUP:]

Nah. It's bottom-feeding. This will happen sporadically, as prices of better maintained, owner occupied properties continue to fall to their real values.

2008 Nov 24 08:56 PM

[orlando vac...:]

Didnt it slow down again on the news recently?

2008 Dec 10 10:34 PM