This week’s National Association of Realtors press release (nar.realtor) sends mixed signals about the housing market. Reports of sluggish home sales and slowing home price appreciation is not what you would expect when the spring market should be humming along. But then again, mixed housing stats may be a vital sign of a healthy market in motion.
First, let’s talk about home sale prices. The NAR’s report on metro home prices and affordability indicate that the average home sale price for the first quarter of the year was $254,800. This is a 3.9 percent increase compared to the same time last year. Average home sale prices in the Baltimore metro area were slightly higher than the rest of nation at $275,300. Not surprisingly, Washington metro prices were significantly higher at $420,000 (a 6.5 increase from the same time last year).
The latest S&P CoreLogic Case-Shiller U.S. National Home Price Index (spindices.com) is almost spot on with the NAR, indicating a 4 percent increase in home sale prices nationwide.
Affordability is always a concern when mixed housing stats confound the market. So, how much income do you need to qualify for a home? The National Association of Realtors Qualifying Income report indicates the average qualifying income for a 5 percent down conventional mortgage is $60,143 nationwide. The average qualifying income in the Baltimore metro area is slightly higher at $64,982. However, because of significantly higher home sale prices, the average qualifying income in the Washington metro area is $99,137.
The neighboring Baltimore and Washington metro areas highlight home pricing extremes in competing markets. Many home buyers who work in the Washington metro area are opting for longer commutes to make homeownership affordable. Others are opting for alternative work to not only lower their housing cost, but eliminate the commute as well. Commenting on affordability, NAR’s chief economist Lawrence Yun stated, “There are vast home price differences among metro markets. The condition of extremely high home prices may not be sustainable in light of many alternative metro markets that are much more affordable. Therefore, a shift in job search and residential relocations into more affordable regions of the country is likely in the future.”
Although home sale prices continue to climb, the national home sale picture is another story. The 1.2 percent increase in spring home sales compared to winter sales should be expected. However, the 5.4 percent decrease from last spring is a disappointment. According to MarketStats by ShowingTime (getsmartcharts.com), the number of homes sold in the Mid-Atlantic region decreased 4.77 percent year-to-date. There was a larger decline in Montgomery County, where there was a 7.25 percent decrease in home sales year-to-date!
Days-on-market is another fundamental indicator of the housing market. And, like home prices and units sold, days-on-market can vary depending on the local market. Homes in the Mid-Atlantic region are taking a bit longer to sell, as days-on-market increased 7.04 percent to 76 days. However, houses in Montgomery County are selling quicker, where days-on-market decreased about 13 percent to 65 days.
Mixed housing stats can confound home buyers, sellers, and their agents. But consider the analysis of David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. He stated that that home sale prices gains have been slowing down until recently. And although mortgage rates are lower, home sales have “drifted down” from their peak during February 2018. Even new home sales and residential investment have shown weakness since last year.
Original published at https://dankrell.com/blog/2019/05/20/mixed-housing-stats/
By Dan Krell
Copyright © 2019
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.