National Home Sales Report

Home Sales

August
home sales were up 18.6% year-to-year nationally, posting a 7.7% increase in sales
activity over July despite Hurricane Irene, which struck the Eastern
seaboard and New England regions at the end of the month. As a result of
the hurricane, the Northeast experienced the smallest increase in sales. At
the same time, persisting restrictions among banks affecting home lending
are having the greatest constraint on sales levels. NAR Chief Economist
Lawrence Yun stated, “The market can easily move into a healthy
expansion if mortgage underwriting standards return to normalcy.”

Home Price

Homes
prices were down, with a 5.1% drop in August compared to a year ago. The
national median price for homes in August was $168,300, with distressed properties,
foreclosures, and short sales still accounting for 31% of sales. The
buyer’s market for residential property continues, as favorable prices, and
record low interest rates offer the most affordable conditions for
purchasing a home in the last 40 years.

Inventory

The
supply of homes measured in months on the market at their current pace of
sales fell 10.5% in the month of August, to an 8.5 month supply of
inventory, down from a 9.5-month supply in July. With homes being more
affordable than they have been in a generation and the lowest levels of new
home construction since World War II, this inventory is projected to
continue to fall, which will eventually result in the appreciation of home
prices and a move toward a balanced market.

Distressed Properties
and What They Mean to You

Since affordable
pricing tops the list of motivation and criteria for buying, it is no
surprise that many first-time home buyers purchase distressed properties,
which can be up to 30% below market value. Cost-conscious buyers are the most
interested in distressed properties, but it is important for them to take
into consideration the additional costs and expenses related to damage or
neglect that occurred during the foreclosure process. On average, distressed
property prices for first-time home buyers are $185,971 with a median of
$153,000.Another consideration for buyers is the transaction time. Short sales and
foreclosures typically take considerably longer to close because buyers deal
with institutions rather than individual sellers. Yet buyers who are patient
can benefit by paying less.As a seller, it is important to understand the current real estate market,
and a real estate agent is there to guide sellers every step of the way.
Agents can help sellers understand what the level of distressed sales and
competition look like in their area. This way, they will be able to price
their home right and will more than likely be able to attract attention from
potential home buyers. Want to know what your Ann Arbor home is worth?

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