Summer home sales rising in N.Y., nationally

Daily Record (Rochester, NY), Jul 3, 2008 by Danielle Derringer

Existing-home sales increased in May due to buyers responding to lower home prices, according to the National Association of Realtors (NAR). Rochester sales also are holding steady, according to local agents.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said buyers are seeing value in the current housing market.

"Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," Gaylord said in a recent NAR report. "Today's buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth."

In Rochester, 2008 so far has seen a stable market, with no reason to stop, according to Mary Jane Mahon, Realtor with Re/Max Realty Group and president of Rochester's Women's Council of Realtors (WCR).

"We had a good early season and things got a little quiet in March and April, but really in that six to eight weeks, things have been progressively steady and on the upswing," Mahon said. "We're getting more phone calls from people wanting to put their homes on the market and I'm also selling a lot."

NAR Chief Economist Lawrence Yun, said there's still a lot of inventory on the market.

"The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down," he said. "Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets."

According to Mahon, Rochester's inventory isn't a problem, in fact, she said the amount of homes for sale allows buyers to take their time to make the best decision.

"For the first time in a couple years, people have more than ten minutes to make the biggest financial decision of their life," Mahon said. "I'm not saying homes are sitting for an extreme amount of time, but buyers don't have to make a decision with 30 other people in an open house. They can have a private showing and return to the home on several different occasions."

Total housing inventory at the end of May fell 1.4 percent to 4.49 million existing homes available for sale, which represents a 10.8-month supply at the current sales pace, down from a 11.2-month supply in April, according to NAR.

Yun said the market nationally is still fragile, and a first- time home buyer tax credit along with a permanent raise in loan limits would be important steps to "get the housing engine humming."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.04 percent in May from 5.92 percent in April; the rate was 6.26 percent in May 2007.

Mahon said the Rochester market is still a normal one, but the banks are making it a little tough for those seeking funding.

"When you're dealing with national banks, they are a little bit more conservative because they're having such hard times in other parts of the country," Mahon said. "If we have a market issue in Rochester, it's the banks, not the buyers or sellers."

Single-family home sales rose 1.6 percent to a seasonally adjusted annual rate of 4.41 million in May from 4.34 million in April, but are 14.5 percent below the 5.16 million-unit pace in May 2007, according to NAR. The median existing single-family home price was $206,700 in May, which is 6.8 percent below a year ago.

Regionally, NAR stated that in the Northeast existing-home sales rose 4.6 percent to an annual rate of 910,000 in May, but are 15 percent below May 2007. The median price in the Northeast was $278,000, down 2.4 percent from a year ago.

Locally, Mahon said she is seeing a heightened interest in the City of Rochester.

"I'm seeing a lot of people moving from the suburbs to the city, especially when they reach their 50s and their kids are grown," Mahon said.

Mahon said other areas that are doing well include Brighton and Pittsford, as well as homes with larger lots.

"I just had an open house a couple weeks ago at a ranch with three acres of land and I had 25 people show up and got two offers immediately for full price and more," Mahon said.

NAR expects the market to stay steady throughout the summer months. Existing-home sales for June will be released July 24.

According to preliminary single-family sales data accumulated by the New York State Association of Realtors (NYSAR), sales of existing single-family homes in New York State in May exceeded April totals by nearly 12 percent, with more than 80 percent of New York's reporting counties seeing an increase in sales.

In May, 6,623 existing single-family homes were sold in New York State, an 11.8-percent increase compared to April. The May 2008 sales total lagged behind the May 2007 sales count of 7,957, a 16.8- percent decrease.

According to NAR, existing single-family home sales rose just 1.6 percent nationally compared to April 2008 and decreased 14.5- percent compared to May 2007.

The May median sales price in New York of $210,000 held steady at the April 2008 level. The May statewide median represents an 8.7- percent decrease from the May 2007 median of $230,000.