RealtyTrac, a provider of nationwide housing data and analytics, released its October 2014 Residential & Foreclosure Sales Report, which shows the median sales price of U.S. single-family homes and condos in October was $193,000, up 2 percent from the previous month and up 16 percent from a year ago to the highest level since September 2008 — a 73-month high.
“This U.S. recovery is largely being driven by investors, and as the lower-priced, often distressed inventory most appealing to investors dries up in a given market, investor activity will slow down in that market and move to other markets with more ideal inventory available,” RealtyTrac Vice President Daren Blomquist said. “This has created a ripple-effect recovery moving out from traditional investor hot spots such as Phoenix, Atlanta and many California markets and into markets such as Charlotte; Columbus, Ohio; Dallas; and Oklahoma City.
“More than 32 percent of all single-family homes and condos purchased so far in 2014 are non-owner occupied compared to 68 percent that are owner-occupied,” Blomquist added. “That is the highest share of investor purchases since we began tracking in 2001.”
The October median sales price — which included both distressed sales of homes in some stage of foreclosure and non-distressed sales — was up 37 percent from a trough of $141,000 in March 2012, but still 19 percent below the previous peak of $237,537 in August 2006. Among 97 metropolitan statistical areas with a population of 500,000 or more with sufficient home price data, 20 have reached new post-recession median sales price peaks in 2013 or 2014, including Denver; Pittsburgh; Columbus, Ohio; and Charlotte, N.C.
“Home prices have risen substantially in the lower price ranges — generally under $400,000. That has led most underwater properties out of trouble,” said Phil Shell, managing broker of RE/MAX Alliance’s Denver division. “We are seeing a ‘compression’ in the market because we are experiencing record low inventories. Prices on the low end are coming up, and while the high end is not necessarily coming down, it has flat-lined; so, we are seeing prices compress in the middle. A homeowner wanting to move up into the market at $550,000 or above will find substantial value and a terrific opportunity.”
The median sales price of distressed homes — those in the foreclosure process or bank-owned — was $128,701 nationwide in October, 36 percent below the median sales price of non-distressed properties ($200,000). But distressed home prices increased at a faster pace, up 18 percent from a year ago, while non-distressed home prices were up 11 percent during the same time period.
“The demand is strong for a lessening distressed inventory and pushing prices to their highest level since 2008,” said Mike Pappas, CEO and president of the Keyes Company, which covers the South Florida market. “Additionally, due to the long delay in our judicial foreclosure system, we are now seeing a higher quality of distressed inventory being liquidated, although overall home prices have begun to gradually level off over the past few months as the market normalizes.”
Additional information on U.S. housing trends from the October 2014 Residential & Foreclosure Sales Report is available on RealtyTrac’s website.