Falling Prices in Select Markets Increase Condo, Co-op Sales by 3.4 Percent in July

By Anuradha Kher, Online News EditorWashington, D.C.–Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in July from 590,000 units in June, according to the latest study conducted by the National Association of Realtors (NAR). These sales figues are, however, 18.6 percent below the 749,000-unit pace in July a year ago. The median existing condo price was $223,400 in July, which is 2.7 percent below the rate in 2007.“The condo and co-op sales have risen mainly because prices have fallen in some markets and buyers are seeing attractive deals out there, which is why the number of buyers in the market has increased,” Lawrence Yun, chief economist at NAR, tells MHN. “This increase is driven mainly by some markets in particular. They are California, Florida, Arizona and Nevada, which were badly hit last year and now seeing an upswing in sales due to decreased prices.”Existing-home sales (including single-family, townhomes, condominiums and co-ops) rose in July to the highest level in five months, although sales have hovered in a relatively narrow range over the past 11 months. They increased 3.1 percent to a seasonally adjusted annual rate of 5 million units in July from a downwardly revised level of 4.85 million in June, but are 13.2 percent lower than the 5.76 million-unit pace in July 2007.NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., says the up-and-down pattern may break soon. “We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead. Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”But Yun believes the industry will have to “wait till the fourth quarter to see what impact the homebuyer tax credit is having on volume of sales. Buying is a three-month process so we will have to wait and watch.”Regionally, existing-home sales in the West jumped 9.7 percent in July to a level of 1.13 million and are 0.9 percent higher than July 2007. The median price in the West was $273,200, down 22.2 percent from a year ago.In the Northeast, existing-home sales rose 5.9 percent to an annual pace of 900,000 in July, but are 11.8 percent below a year ago. The median price in the Northeast was $278,700, which is 4.9 percent lower than July 2007.In the Midwest increased 0.9 percent to an annual rate of 1.12 million in July, but are 17.0 percent lower than July 2007. The median price in the Midwest was $175,400, up 1.0 percent from a year ago.The only region where existing home sales slipped is the South, where they went down 0.5 percent to an annual pace of 1.85 million in July, and are 18.1 percent below a year ago. The median price in the South was $179,300, down 3.5 percent from July 2007.“In the South, Florida is now seeing an increase in the number of buyers but Texas, Georgia and the Carolinas are not doing so well. This brings the total number of sales in the region down,” says Yun. “Even though the home prices in these states are affordable, sales there are falling because of the overall tightening of mortgage conditions. Since these states were not badly hit last year, they haven’t seen any drastic decrease in prices and people aren’t seeing any additional incentives in that regard.”