Region sees 18% decline in home prices
Updated 1:38 pm, Thursday, May 10, 2012
Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized, but the Bridgeport-Stamford-Norwalk metropolitan area was among those that continue to languish. The federally defined geographic cluster includes 25 municipalities mostly in lower Fairfield County, but stretches as far east as Milford.
The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report Wednesday. In the fourth quarter, only 29 areas had gains.
Ulster County, N.Y., had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by the Bridgeport-Stamford-Norwalk metropolitan area with an 18 percent decline; Mobile County, Ala., at 14.7 percent; and Atlanta-Sandy Springs-Marietta, Ga., at 12 percent.
“In my opinion, the market is stable at lower-end and mid-market prices,” he said.
Martin Nirschel, a broker with Weichert Realtors in Stamford, speculated that the broader decline in the region may be due to the softening of the high-end market. “It’s really a new reality,” he said, adding that there are fewer multimillion dollar sales in Stamford these days. The highest sale this year was a house in Shippan at 298 Ocean Drive West that fetched $4.2 million.
The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.
The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.
Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.
“The housing market is still depressed, but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., said in a telephone interview Wednesday. “We’re on the mend, but it’s still something that will take two or three years before we’re back to normal.”
The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.
The best-performing metro area was Cape Coral-Fort Myers, Fla., where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids-Wyoming, Mich.; 16.9 percent in Palm Bay-Melbourne-Titusville, Fla.; and 16.6 percent in Erie County, Pa.
“We 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,” Yun said in the report. “This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”
Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.
Fannie Mae, the nation’s biggest mortgage-finance company, reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington-based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.