Residential property sales, excluding new homes, in the US rose in March for the first time in four months with foreclosures accounted for 35% of transactions, according to the latest figures.
Sale climbed 6.8% to a 5.35 million annual rate, more than expected, from a 5.01 million pace in February, figures from the National Association of Realtors (NAR) show.
The median prices climbed 0.4% from March 2009 and sales were 16.1% above the 4.61 million unit level in March 2009.
Lawrence Yun, NAR chief economist, said it was encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends, namely that sales have been above year ago levels for nine straight months and inventory has trended down from year ago levels for 20 months running.
‘The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle class housing wealth that may have been wiped out without the housing stimulus measure,’ he declared.
Yun said the foreclosure situation is manageable. ‘Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably. In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first time home buyers,’ he explained.
A parallel NAR survey shows that first time buyers bought 44% of properties in March, up from 42% in February. Investors accounted for 19% of transactions in March, unchanged from February and the remaining sales were to repeat buyers.
But the latest figures from RealtyTrac, show the number of foreclosures have increased by 7% in the first quarter of 2010. Foreclosure filings also increased on a monthly basis, up 19% in March compared with February, the highest monthly total since RealtyTrac began issuing its reports in January 2005.
‘Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March,’ said James Saccacio, chief executive of RealtyTrac.
‘One difference, however, is that the increases were more tilted toward the final stage of foreclosure, with REOs increasing 9% on a quarterly basis in the first quarter of 2010 compared to a 13% quarterly decrease in REOs in the first quarter of 2009.
‘This subtle shift in the numbers pushed REOs to the highest quarterly total we’ve ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline,’ he explained.
Sales could increase this month as the deadline for the end of the first time buyer credit programme looms at the end of April.
‘With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears,’ Yun said.