WASHINGTON — Sales of previously occupied homes were down in May nationwide, but Elkhart County sales are continuing to bounce back from awful lows the past two years.
“It’s apples and oranges,” is how Don DeShano, president of the local Multiple Listing Service, described the county vs. the nationwide sales figures.
Elkhart County sales figures are up 36.9 percent for the first five months. Sales in May were up 30.3 percent from a year ago, according to DeShano.
“If you look at that, it is obviously a recovering market so to speak,” he said. “But last year was so bad it can’t be interpreted as being a good year.”
The local sales increases are measured in dollars, not units. If unit sales are counted, then during the first five months the number of units sold was up 34.3 percent, DeShano said. In 2009 there were 1,242 units sold in the first five months and 1,668 units were sold this year.
Nationwide sales of previously occupied homes dipped in May, even though buyers could receive government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties. That means home prices could soon be heading down after stabilizing over the past year.
Last month’s sales fell 2.2 percent from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal tax incentives is gone entirely, starting next month.
The report is “a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us,” said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.
DeShano said there are similarities in the type of home selling nationwide and locally.
“The units, and a lot of the dollars we are seeing, is foreclosure and distressed property,” DeShano said. “So, the average price of a property is down substantially. There are a lot of investors out there who are messing around in the market.”
Most economists don’t expect the housing market to be weak enough to pull the economy back into recession. They anticipate that home sales will dip over the summer, then start growing by fall as the 9.7 percent unemployment rate begins to decline.
Existing home sales have climbed 25 percent from the 4.5 million annual rate they hit in January 2009 — the lowest level of the recession. But they’re still down 22 percent from the peak rate of 7.25 million in September 2005.
DeShano’s feeling is that the Elkhart County market will remain flat throughout the rest of the year because consumers are still worried about their jobs. But if that job security hurdle can be overcome, DeShano says local home sales should increase quickly.
“There is a huge pent up demand. There are a lot of people who want to sell their houses and a lot of people who want to buy,” he said.
The report counts home sales once a deal closes. So federal tax credits of up to $8,000 for first-time buyers and up to $6,500 for existing homeowners helped prop up sales in May. The deadline to get a signed sales contract and qualify was April 30. Buyers must close their purchases by June 30.
DeShano said the incentives helped local sales.
“April was huge,” he said, “because of those tax credits.”
April sales in Elkhart County were up 77.7 percent this year over 2009. The tax credits were expected to lift sales in May and June.
Nationally, first-time buyers made up 46 percent of sales. The median sales price in May was $179,600, up 2.7 percent from a year earlier.
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Elkhart County numbers look good
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