Anyone thinking that the free fall in the residential real estate market was about to bottom out, needs to think again based on the dismal figures released today by the National Association of Realtors (NAR).
Once again, existing home sales fell, and once again, median home prices declined from a year ago.
The specific figures are these:
- Sales of existing home fell by 2 percent in March to a seasonally adjusted annual rate of 4.93 million units, down 19.3 percent compared with a year ago.
- Median home prices suffered a decline of 7.7 percent from the median price a year ago. This was the second-biggest year-over-year price decline following a record 8.4 percent drop in February.
On the other hand, there was some glimmer of light in these dark statistics:
- While sales were down 6.5 percent in the Midwest and 3.5 percent in the South, slight increases in sales (2.2 percent) were recorded in both the Northeast and the West.
- The median home price also showed a very slight up-tick. The median price in March was $200,700, which, although down 7.7 percent from a year ago, was still up from February’s median price of $195,600.
However, this rise in median home price was concentrated in one section of the country. The Northeast was the country’s only region to experience a rise in median prices, which were up 4.6 percent compared with a year ago.
Prices were down in all other regions of the country, dropping by 14.7 percent in the West, 7.1 percent in the South and 5.3 percent in the Midwest.
NAR also reported home price gains in certain metro areas of country whose regions generally showed declines — Des Moines, Iowa, Austin, Texas, and Durham, North Carolina.
So what does all this mean?
Contrary to the sugar-coating given to these figures by NAR economist Lawrence Yun, we believe that the residential real estate market is still far from bottoming out — and that as more adjustable rate mortgages reset it could get even worse than it is now.
For an update on the commercial real estate market, click here.