Economic stimulus package may spur some buying interest in US real estate
According to a report by the National Associations of Realtors (NAR) on Feb 12, 2009, the median price of single-family home resale in 88 percent of the United States’ metropolitan areas trended down in the fourth quarter 2008 from a year earlier. 45 percent of the transactions in this quarter were distressed sales, foreclosures and short sales, which lead to the decline in the median price. The most significant price drop occurred in Florida, Michigan, California and Arizona.
Nationally, the median price for single-family homes dropped 12.4percent year-over-year in the fourth quarter. Regionally, the median home prices dropped 25.1 percent in the West, 10.6 percent in the Midwest and 7.5 percent in the South and 4.7percent in the Northeast.
NAR President Charles McMillian pointed out “distressed home sales have risen from about 38 percent of transactions in the third quarter, meaning people are responding to discounted prices and are slowly absorbing the excess inventory. Buyers clearly see value in today’s pricing.”
Lawrence Yun, NAR chief economist reported the largest gain in sales volume for the fourth quarter was in Nevada, up 133.7 percent, followed by California, rose 84.7 percent, Arizona, up 42.6 percent and Florida with a 12.5 percent increase. This is a clear pattern that strong sales gain in lower price homes occurs in areas with extreme price declines resulting from foreclosures.
In the condo sector, the strongest condo price increases in this quarter were in the Dallas – Fort Worth – Arlington in Texas, up 14.1 percent, followed by Toledo, Ohio, up 11.4 percent compared to fourth quarter in 2007.
Yun noted despite the market being clearly depressed by job losses and consumer concerns about the economy, the much anticipated housing provisions in the economic stimulus package may spur some buying interest for the critical spring home buying season.