Kansas City, Mo. Existing home sales in the Midwest halted their brief resurgence in August, in part because some buyers are having trouble meeting tougher lending standards.
The National Association of Realtors said Thursday that total sales in the Midwest were equal to the 111,000 homes sold a year ago. The median sale price for the region fell 10 percent to $149,900.
Nationally, sales rose 2 percent, without adjusting for seasonal factors, while the median sale price fell 12.5 percent to $177,700, the Realtors association said.
Midwestern cities, which have struggled amid layoffs in key manufacturing and automaking industries, had shown signs of bottoming out and starting to recover. But sales of previously occupied homes in August fell in all but four of the 12 major Midwestern metro areas tracked in the Associated Press-Re/Max Monthly Housing Report, also released Thursday.
Across the region
Median sales prices also dipped in 10 of the markets tracked in the survey.
The survey includes all home sales recorded in the metropolitan statistical area by all local agents, regardless of company affiliation.
Sales declined by double digits in four cities — Wichita, Kan.; Indianapolis; St. Louis; and Omaha, Neb.
In St. Louis, sales fell almost 14 percent from a year ago and the median sale price declined more than 6 percent to $135,900.
Laura Maze, who owns her own realty firm in the St. Louis suburb of St. Charles, Mo., said the good news is the $8,000 tax credit for first-time home buyers has continued to draw more potential customers into the market. But she said lenders and federal regulators have tightened credit requirements and required higher down payments, which has caused many of those first-timer deals to fall through.
“The open houses are (attracting) just tire kickers or neighbors, they’re not doing much good right now,” Maze said. “We’re just seeing a lot of things that we haven’t seen before.”
Nationally, foreclosures and other financially distressed homes made up about 30 percent of all sales. In the Midwest, sales of homes $100,000 and less were up almost 4 percent while sales of homes priced more than $250,000 were down.
In Des Moines, Iowa, sales in August were down more than 3 percent from a year ago while the median sale price fell about 7 percent to $150,500.
James Mooney, a real estate agent with Re/Max, said overall sales “have been creeping higher” but he acknowledged that he believes most of those gains are of distressed properties and don’t necessarily point to an improving market.
“I’m still pretty mixed up emotionally about it,” Mooney said. “There’s some good things but really weak signals, in my opinion.”
He added that he hopes Congress extends the tax credit, slated to expire at the end of November, and would love a tax credit extended to all home buyers. But he also said lenders and federal regulators need to stop changing finance requirements so the market can stabilize.
Chicago, the region’s priciest market tracked by the AP-Re/Max report, was one of four cities that saw a sales gain in August. Sales increased about 1 percent, while the median sale price fell 18 percent to $200,000.
Karen Biazar of the North Clybourn Group said it’s difficult to generalize with a market as large as Chicago but she felt a large portion of those sales reflected foreclosures and short sales, brought on as the city’s unemployment rate hovered around 10 percent. In a short sale, the lender must agree to accept less than full repayment of the mortgage.
Combined with the stiffer financing rules, the economy has hampered some of Biazar’s sales, she said. But she added that it has also forced people to be more financially prepared.
“There are far more qualified buyers than I’ve ever seen,” she said.