Inventory is shrinking and traffic for homebuyers seems to be increasing, but according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, home prices were down in March. One reason for this, according to the survey, which includes about 2,500 real estate agents, is the high number of distressed properties on the market.
Home prices for non-distressed properties in March dropped 5.7 percent from a year ago in March 2011. Prices for damaged REO properties also saw a 5.7 percent decline in prices, while move-in ready REO prices fell 2.5 percent during the same period. Short sales declined significantly, with prices falling 14.3 percent during the one-year period.
According to a recent RealtyTrac report, the average price of a home sold via short sale in January 2012 was $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.
Driven by an increase in short sales, the total share of distressed properties in the housing market in March was 47.7 percent when using a three-month moving average, according to the HousingPulse Distressed Property Index (DPI). This marks the 25th consecutive month the index has hovered over the 40 percent mark.
"With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low-and also why forced REO and short sales are such a big proportion of the remaining market.”
Over the past six months, the proportion of short sale transactions in the housing market increased from 17.8 percent to 19.9 percent.
The survey also found that traffic indexes for first-time homebuyers, current homeowners, and investors all showed substantial increases in March compared to the year before, with indexes showing current homeowners and investors were higher than those recorded when the federal homebuyer’s tax credit was offered in 2009 and 2010.
Meanwhile, HousingPulse found that real estate agents reported housing inventories well below levels seen a year ago, especially for attractive properties in desirable locations.
What Agents Said in the Survey
“[Purchase] Activity has increased while prices continue to fall. There is a significant increase in the number of short sales and foreclosures on the market in our area.” – Agent in Delaware.
“Sales are up 29 percent year-to-date through the end [of] March. Pendings are up 55 percent. Prices just are beginning to rise.” – Agent from California.
“Volume is increasing, but prices are not. Only very nice homes are selling faster.” – Agent in Pennsylvania.