WASHINGTON (MNI) – The following is a text from the National
Association of Realtors saying that the median single-family home price
of existing homes rose on a year-over-year basis in more than half of
the metropolitan areas they measure in the first quarter of 2012.
Published May 9:

Median existing single-family home prices are firming in many
metropolitan areas, while improving sales and declining inventory are
creating more balanced conditions, according to the latest quarterly
report by the National Association of Realtors .

The median existing single-family home price rose in 74 out of 146
metropolitan statistical areas (MSAs) based on closings in the first
quarter from the same quarter in 2011, while 72 areas had price
declines. In the fourth quarter of 2011 only 29 areas were showing
gains from a year earlier. A new breakout of income requirements on a
metro basis shows most buyers have the necessary income to buy a home in
their area, assuming a favorable credit rating.

Lawrence Yun, NAR chief economist, said there is some volatility in
the price performance. “Home prices are more volatile than normal
because of sudden upswings in buyer activity in some localities, and
also are affected by the prevalence of distressed sales,” he said.
“Home prices lag sales activity because the transactions were negotiated
mostly in the previous quarter. Given the steadily dwindling supply of
inventory and notably higher listing prices that are being negotiated
today, prices are expected to show further improvements in the near
future.”

Yun said a big part of the story is housing inventory. “We now
have broad shortages of lower priced homes in much of the country, with
very tight supply in Western states for homes through the middle price
ranges. This is good news for many sellers who wish to list now, or for
those waiting for prices to improve.”

At the end of the first quarter there were 2.37 million existing
homes available for sale, which is 21.8 percent below the close of the
first quarter of 2011 when there were 3.03 million homes on the market.
There has been a sustained downtrend since inventories set a record of
4.04 million in the summer of 2007.

The national median existing single-family home price was $158,100
in the first quarter, which is 0.4 percent below $158,700 in the first
quarter of 2011. The median is where half sold for more and half sold
for less. Distressed homes2 – foreclosures and short sales which sold
at deep discounts – accounted for 32 percent of first quarter sales;
they were 38 percent a year ago.

Total existing-home sales,3 including single-family and condo,
increased 4.7 percent to a seasonally adjusted annual rate of 4.57
million in the first quarter from a downwardly revised 4.37 million in
the fourth quarter, and were 5.3 percent above the 4.34 million level
during the first quarter of 2011 when sales spiked.

“This is the highest first quarter sales pace since 2007,” Yun
said. “With strong market fundamentals, total home sales this year
should rise 7 to 10 percent.”

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc.,
in Miami, said there are more opportunities in today’s market.
“Historically favorable housing affordability conditions are making it
easier for buyers to enter the market despite the unnecessarily tight
credit conditions,” he said. “Housing supply and demand are roughly
balanced with overall housing supply at the lowest level in six years,
putting sellers on an even footing with buyers in most markets.”

Included with this report is a new breakout on qualifying incomes
to purchase a median-priced existing single-family home on a
metropolitan area basis, assuming downpayments of 5 percent, 10 percent
or 20 percent, and an interest rate of 4 percent with 25 percent of
gross income devoted to mortgage principal and interest.

“Qualifying incomes are well below median incomes in most of the
country, which means home buyers generally can stay well within their
means,” Yun said. “For example, a buyer in Indianapolis making a 10
percent downpayment would need an annual income of $24,0004 to purchase
a median-priced home, while in Seattle it would be $55,300. For now,
buyers are facing an extraordinarily advantageous situation if they can
obtain a mortgage.”

The national median family income was $61,000 in the first quarter.
However, to purchase a home at the national median price, a buyer making
a 5 percent downpayment would only need a $34,700 income. With a 10
percent downpayment the required income would be $32,900, while with 20
percent down, the income drops to $29,300.

First-time buyers purchased 33 percent of homes in the fourth
quarter, unchanged from the fourth quarter; they were 32 percent in the
first quarter of 2011.

The share of all-cash home purchases in the first quarter was 32
percent, up from 29 percent in the fourth quarter; they were 33 percent
in the first quarter of 2011. Investors, drawn by bargain prices and
who make up the bulk of cash purchasers, accounted for 22 percent of all
transactions in the first quarter, up from 19 percent in the fourth
quarter; they were 21 percent a year ago.

In the condo sector, metro area condominium and cooperative prices
– covering changes in 52 metro areas – showed the national median
existing-condo price was $157,200 in the first quarter, which is up 3.4
percent from the first quarter of 2011. Eighteen metros showed
increases in their median condo price from a year ago and 34 areas had
declines.

Regionally, existing-home sales in the Northeast jumped 8.6 percent
in the first quarter and are 6.6 percent above the first quarter of
2011. The median existing single-family home price in the Northeast
declined 3.2 percent to $226,300 in the first quarter from a year ago.

In the Midwest, existing-home sales rose 5.5 percent in the first
quarter and are 11.7 percent higher than a year ago. The median
existing single-family home price in the Midwest increased 0.8 percent
to $125,300 in the first quarter from the same quarter in 2011.

Existing-home sales in the South increased 2.1 percent in the first
quarter and are 4.1 percent above the first quarter in 2011. The median
existing single-family home price in the South rose 1.2 percent to
$143,600 in the first quarter from a year earlier.

Existing-home sales in the West rose 5.9 percent in the first
quarter and are 1.4 percent higher than a year ago. The median existing
single-family home price in the West slipped 0.9 percent to $196,200 in
the first quarter from the first quarter of 2011.

** MNI Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$]