Agents in a number of markets are starting to see a drop in existing home prices, which will put a smile on the faces of clients looking to buy, but leave sellers feeling cold.
According to data from the National Association of REALTORS®, the median price of an existing home (i.e. one that has previously been lived in) fell 0.24% from September to hit $247,000 in October.
For many clients who are on a budget, every penny helps.
According to NAR, prices have been falling each month since hitting a high of $263,300 in June. That seasonal adjustment is fairly typical, as prices usually soar in summer as the market is flooded with buyers hoping to close on homes before the school year begins, noted REALTOR.com® chief economist Danielle Halle.
“We usually see prices go down as we move into the fall. Buyers who are in the market now are usually looking for smaller properties that tend to cost less. [But] in spite of the month-to-month price decline, it’s still a pretty tough market for buyers. There aren’t very many options of homes available for sale.”
Median prices were still up 5.5 percent year-over-year. Single-family homes were a median $248,300.
Moreover, October home sales edged up 2 percent over September, but were down about 0.9 percent from a year earlier, according to the seasonally adjusted numbers in the report.
Monthly closings were up across the nation, but they dipped annually in the U.S. particularly in the South, by 1.8 percent, and the Midwest, at 1.5 percent. The slight drop in the South may be due to Hurricanes Harvey and Irma, which hammered the Houston area and much of Florida and paused many sales temporarily.
Lawrence Yun, NAR’s chief economist, sees some positive trends that can boost agents’ business.
“Job growth … is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home. While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
How does your market stack up? Existing home prices slipped in every region — except the West.
The median price in the region, home to uber-expensive Silicon Valley and cities like San Francisco, Seattle and Portland, OR, was $375,100. That’s up 0.48 percent from September and 7.8 percent higher than a year ago.
The next most expensive region was the Northeast, where the median price was $272,800. That’s down 0.8 percent month-over-month, but up 6.6% annually.
It was followed by the South, at $214,900, a 1.1 percent monthly drop, but a 4.6 percent annual increase. Homes were cheapest in the Midwest at $194,700, a 0.9 percent dip from September, but a 7.1 percent rise from October 2016.