Total existing home sales declined 1.5 percent to 5.51 million in the first quarter of 2018, compared to 5.59 million in Q4 of 2017 according to the National Association of Realtors’ (NAR) quarterly Metropolitan Median Area Prices and Affordability report released on Monday. Compared to the same period last year, home sales were down 1.7 percent.
The quarterly report looks at the breakdown of single-family, condo and co-op prices by metro market, as well as the median sales price of existing single-family homes for metropolitan areas.
The report found that inventory shortages and a fast-paced appreciation of home prices impacted sales during the first quarter, with the national median existing price for a single-family home increasing 5.7 percent to $245,000 from $232,000 during the same period last year. The last quarter had seen a similar uptick in prices climbing 5.3 percent compared with Q4 2016.
In metro markets, 162 of the 178 areas examined by the report, showed price gains, with 53 of those areas registering double-digit increases.
The twin challenges of supply and affordability impacted the overall sales in the market according to Lawrence Yun, Chief Economist at NAR. “The worsening inventory crunch through the first three months of the year inflicted even more upward pressure on home prices in a majority of markets. Following the same trend over the last couple of years, a strengthening job market and income gains are not being met by meaningful sales gains because of unrelenting supply and affordability headwinds.”
The stiff competition among consumers vying to find an affordable property and the prevalence of multiple bids for such homes were adding pressure to the rising home prices, according to Yun.
The report underlined just how much of a challenge was posed by the shortage of housing supply in the market. It indicated that at the end of the first quarter, there were 1.67 million existing homes available for sale, which was 7.2 percent below the 1.80 million homes for sale at the end of the first quarter in 2017. The average supply during the first quarter was 3.5 months, down from 3.7 months in the first quarter of last year.
It came as no surprise then that four of the five most expensive housing markets were in California with prices ranging between $1.3 million to $610,000. These markets were San Jose Metro Area, San Francisco-Oakland-Hayward, Anaheim-Santa Ana-Irvine, and San Diego-Carlsbad. The only non-California market among the five most expensive ones was urban Honolulu in Hawaii.
During the quarter, the markets with the lowest changes in prices included those mostly in the North Eastern region with prices ranging from $73,000 to $103,000. They included Decatur, Illinois; Cumberland, Maryland; Youngstown-Warren-Boardman, Ohio; Elmira, New York; and Binghamton, New York.