Monday, November 15, 2004

What Else Is New? Home Sales Soar

The Wall Street Journal Online

Nov. 15, 2004 -- Sales of existing homes continued at a strong pace in the third quarter, while home-sale prices were higher across most metropolitan areas, according to a new survey.

The National Association of Realtors said today that existing-home sales rose 4.1% to 7.66 million units in the third quarter, up from the 7.36 million-unit sales rate a year earlier. The record was a level of 7.80 million units in the second quarter.

Sales rose by double-digit rates in 10 states. The strongest year-to-year increase was in Arizona. The resale pace was 20.3% above the third quarter of 2003. While West Virginia rose 17.9% from a year ago, and North Carolina posted the third strongest increase, up 17.5% from 2003.

Regionally, the South experienced the strongest gain in sales activity at a record annual rate of 3.16 million units, up 5.6% from a year earlier. Tennessee's resale pace was 15.5% higher than the third quarter of last year. Georgia experienced a 12.3% gain, while Virginia was up 9.4%.

According to Freddie Mac, the national average rate for a 30-year fixed-rate mortgage was 5.89% in the third quarter, down from 6.13% in the second quarter. The rate was 6.01% in the third quarter of 2003.

The NAR said the national median existing-home price rose 7.7% last quarter, to $188,500, up from $175,000 in the second quarter of 2003. The median is a typical market price where half of the homes sold for more and half sold for less.

The biggest increase was in Las Vegas, with a median price of $283,200 was 53.7% higher than a year earlier. The median price in Bradenton, Fla., was $248,000, up 40.7% followed by the Riverside-San Bernardino, Calif., area, where the third-quarter median price of $311,700 was 36.2% higher from a year ago.

The association's home-price report, covering 127 metropolitan areas, showed 45 cities with double-digit annual increases and 11 areas posting small declines.

David Lereah, NAR's chief economist, said in a prepared statement that while sales and prices are still strong, the rate of home-price appreciation is slowing. "Nationally, the annual rate of price growth is slower than in the second quarter, and that is good for long-term gains in the market," he said. "Home prices are still rising faster than historic norms because we continue to have more buyers than sellers."

Regionally, home-sales prices were the strongest in the West, where the median resale price during the third quarter was $271,000, up 14.9% from the third quarter of 2003. After the Las Vegas and Riverside-San Bernardino areas, the strongest increase in the region was in San Diego, which was 32.5% above a year ago.

In the Northeast, the median resale home price of $218,100 rose 10.6%, while in the South, the median price was $172,500, up 5.9% from the third quarter of 2003. In the Midwest, the median existing-home price of $154,000 was 4.8% higher than last year.


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