Both sales and prices decline in second quarter

In the summer of 2010, many borrowers were taking advantage of the federal tax credit for first-time home buyers, which boosted home sales and helped keep prices relatively stable. This year there was no tax credit available, and the home prices and sales recorded reflect the lack of stimulus.

According to the most recent data from the National Association of Realtors, prices and sales of existing homes declined in the second quarter of 2011 compared to the same quarter a year prior.

The data showed sales of existing homes dropped 12.7 percent compared to a year before, with sales declining each month of the quarter by 5.4 percent below months in the first quarter of 2011. Median price for existing homes also declined in 109 of the 151 metropolitan areas.

The national median price for an existing home is $171,900, down from $176,800 in the second quarter of 2010. Distressed properties accounted for 33 percent of all second quarter home sales, being sold at about 20 percent less than regular homes.

Lawrence Yu, chief economist of the NAR, said the small difference between median price is a sign of stabilization, and the level of foreclosures can depress median prices.

The Southeast Minnesota Association of Realtors, however, found home sales in Rochester increased 74 percent compared to the second quarter in 2010. KAAL-TV ABC affiliate reported the local market even experienced a decline of new listings in July, illustrating how inventory had reduced.  

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