Home sales plunged after tax credit ended
November 11, 2010, 12:00 pm EST
Any possible housing market recovery hit a snag during the three months ended September 30, as a government tax credit for homebuyers wound down.
Home prices fell only slightly during the quarter, according to a report from the National Association of Realtors (NAR), but the number of homes sold plummeted more than 25%, compared with the previous quarter.
The fall-off in sales volume remains a troubling feature of the current housing market scene because there's rarely been a more attractive time to buy.
"Given the relationship between mortgage interest rates, home prices and median family income, the buying power in today's market is matching the highest levels we've seen dating all the way back to 1970," said NAR President Ron Phipps.
Many sales were undoubtedly happened in early 2010 as homebuyers accelerated their purchases to qualify for the tax credit, which shaved as much as $8,000 off their tax bills.
Contracts had to be signed by the end of April to qualify and the deals had to close by the end of September.
The national median price for a single-family home sold during the quarter was $177,900, down 0.2% from the same period a year ago and up 0.6% from the second quarter of 2010.
Single-family home prices rose 2.5% to $253,400 in the Northeast, the only region that showed price improvement. Midwest prices fell 3% to $145,600, prices dropped 1.9% in the South and 0.4% in the West region.
The metro area with the biggest gain was Burlington, Vt., where the median price of $286,300 was 17.6% higher than 12 months earlier. The biggest loser was Ocala, Fla., down 20% to $82,200.
San Jose, Calif., recorded the highest median price -- $628,700 -- during the quarter, just nosing out Honolulu at $628,100.
Youngstown, Ohio, the old steel town, had the lowest median sale price, at $60,400.
Condo prices fared worse than those of single-family houses. The national median fell 3.9% from 12 months earlier to $171,400.
Palm Bay, Fla., had the biggest year-over-year loss: down 32% to $73,000; Jacksonville. Fla., was off 31% to $63,200. Phoenix condo prices also plunged, down 26.6% to $73,300.
Condo prices in the New York metro area soared, up 34.5% to $400,000, the most, by far, of any city.
