Washington, D.C.—There was a surge in existing home sales during the month of March, largely due to buyers responding to the homebuyer tax credit and favorable affordability conditions, according to the National Association of Realtors.
Overall existing-home sales rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1 percent above the 4.61 million-unit level in March 2009. Meanwhile, existing condominium and co-op sales increased 3.1 percent to a seasonally adjusted annual rate of 670,000 in March from 650,000 in February, and are 39.3 percent higher than the 481,000-unit level in March 2009. The median existing condo price was $170,600 in March, which is 0.7 percent below a year ago.
Richard Swerdlow, CEO of Condo.com tells MHN that despite the real estate “boom to bust” crisis, their web site produced unusually strong sales and record increases in traffic and buyer inquiries in March 2010. “Such activity indicates a road to recovery and near-future market rebound. Several factors explain this activity and we expect the volumes to continue this trend. Distressed properties such as short sales and foreclosures in metropolitan areas are driving more leads than ever.”
Lawrence Yun, NAR chief economist of NAR, says, “Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running. Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably. In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers.”
Buyers are being enticed by the temporary tax credit, low interest rates and loosened restrictions on lending along with an influx of foreign buyers taking advantage of the weak dollar. “As inventory sheds and government and industry efforts strengthen demand, prices are eventually likely to stabilize,” says Swerdlow.
Another reason for the uptick in sales is the fact that home values are stabilizing.