The latest quarterly report from the National Association of Realtors shows that many metro areas are now seeing more balanced conditions.
Lawrence Yun, NAR chief economist, said the figures of this report reflect greater home sales activity at lower price points. "Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish," he said.
He continued that "more importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices."
In terms of pricing, median existing single-family home prices rose in 29 out of 149 metro areas in the fourth quarter of last year. The national median price was $163,500 for the quarter, down a considerable 4.2 percent from the year prior.
Partly to blame for this drop is the still high number of distressed homes on the market, accounting for 30 percent of sales and selling at discounts of 15 to 20 percent.
According to the NAR, "Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times because the level of distressed sales, which artificially depress median prices, can vary notably in given markets. Annual price measures, also reported today, generally smooth out any quarterly swings."
It’s important to keep in mind that real estate is about local trends. Your state or region may be experiencing a slow down, but if you have booming job growth in your town then the housing market will likely reflect this. Regionally, you’ll see the most buying power in the Midwest, which boasts the lowest prices.
In the Midwest, existing-home sales increased 7.0 percent in the fourth quarter and are 14.1 percent higher than a year ago. The median existing single-family home price in the Midwest declined 3.3 percent to $134,100 in the fourth quarter from the fourth quarter in 2010.
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions vary widely around the country. "Even with record high housing affordability conditions, all real estate is local," he said.
For now the broad national scope saw existing-home sales increased 5.9 percent in the fourth quarter and was 9.2 percent above last year at this time. The NAR reports that all regions rose from third quarter levels.