home prices are on the riseLocal Portland Real Estate MarketPortland Real Estate listings August 6, 2015

Homes are sold at the highest $$, ever

Homes are officially being sold at the highest prices, ever

Existing-home sales also reach highest pace in 8 years

Ben Lane
July 22, 2015

Thanks to rising demand and shrinking supply, the median existing-home price for all housing types reached
an all-time high in June.

According to the latest data from the National Association of Realtors, the median existing-homes sales
price rose to $236,400, which exceeds the previous peak median sales price set in July 2006 of $230,400.

June’s total also rose 6.5% above June 2014.

In May, the median existing-home price for all housing types was $228,700, which was 7.9% above May

That marked the 39th consecutive month of year-over-year price gains, making June the 40th straight month
of year-over-year price gains.

Despite record prices, existing-home sales also reached their highest pace in more than eight years.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes,
condominiums and co-ops, increased 3.2% to a seasonally adjusted annual rate of 5.49 million in June from a
downwardly revised 5.32 million in May.

Sales are now at their highest pace since February 2007 (5.79 million), have increased year-over-year for nine
consecutive months and are 9.6% above a year ago (5.01 million).

Lawrence Yun, NAR chief economist, said that buoyed by June's solid gain in closings, this year's spring
buying season has been the strongest since the crisis began.

"Buyers have come back in force, leading to the strongest past two months in sales since early 2007," Yun
said. "This wave of demand is being fueled by a year-plus of steady job growth and an improving economy
that's giving more households the financial wherewithal and incentive to buy."

According to NAR’s report, total housing inventory at the end of June rose slightly by 0.9% to 2.30 million
existing homes available for sale, which is is 0.4% higher than the same time period a year ago (2.29 million).

Unsold inventory is at a 5.0-month supply at the current sales pace, down from 5.1 months in May.

"Limited inventory amidst strong demand continues to push home prices higher, leading to declining
affordability for prospective buyers," said Yun. "Local officials in recent years have rightly authorized permits
for new apartment construction, but more needs to be done for condominiums and single-family homes."

According to NAR’s report, the percent share of first-time buyers fell to 30% in June from 32% in May, but
remained at or above 30% for the fourth consecutive month.

One year ago, first-time buyers represented 28% of all buyers.

NAR President Chris Polychron said that Realtors are reporting “drastic imbalances” of supply in relation to
demand in many metro areas — especially in the West.

"The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or
above asking price," Polychron said. "Furthermore, tight inventory conditions are being exacerbated by the
fact that some homeowners are hesitant to sell because they're not optimistic they'll have adequate time to find
an affordable property to move into."

All-cash sales dropped to the lowest share since December 2009, reaching just 22% of transactions in June,
down from 24% in May and 32% a year ago.

Individual investors, who account for many cash sales, purchased 12% of homes in June (14% in May) — the
lowest since August 2014 (also 12%) and down from 16% in June 2014.

Distressed sales, which are foreclosures and short sales, fell to 8% in June (matching an August 2014 low)
from 10% in May, and are below the 11% share a year ago.

According to NAR’s data, 6% of June sales were foreclosures and 2% were short sales. Foreclosures sold for
an average discount of 15% below market value in June (unchanged from May), while short sales were
discounted 18% (16% in May).

NAR’s report also showed that single-family home sales increased 2.8% to a seasonally adjusted annual rate
of 4.84 million in June from 4.71 million in May, and are now 9.8% above the 4.41 million pace a year ago.

The median existing single-family home price was $237,700 in June, up 6.6% from June 2014 and also
surpassing the peak median sales price set in July 2006 ($230,900).

Existing condominium and co-op sales rose 6.6% to a seasonally adjusted annual rate of 650,000 units in June
from 610,000 units in May, up 8.3% from June 2014 (600,000 units) and the highest pace since May 2007
(680,000 units).

The median existing condo price was $226,500 in June, which is 5.5% above a year ago and the highest since
August 2007 ($229,200).

"June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually
prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,"
Yun concluded.

7/22/2015 9:00 AM

Ben Lane is a reporter for HousingWire. Previously, he worked for TownSquareBuzz, a hyper-local news
service. He is a graduate of University of North Texas.