Sales of existing homes rise in West

Homebuyers shrugged off economic worries and pounced on sharply discounted foreclosed homes in California, Nevada and Arizona, driving up sales last month across the West, according to two reports released Thursday.

A total of 89,000 existing homes and condos were sold in March in the 13-state region. Sales were up nearly 22 percent from the same month last year, without adjusting for seasonal factors, according to the National Association of Realtors.

Demand for foreclosed homes and other distressed properties pulled down the region's median sales price by 11 percent to $252,400, the association said.

Nationally, home sales fell 3 percent to an annual rate of 4.57 million in March month from a downwardly revised pace of 4.71 million units in February, the National Association of Realtors said Thursday.

Meanwhile the U.S. median home price declined 12 percent to $175,200.

The surge in sales was centered mainly in the Southwest — a hotbed of home price appreciation during the housing boom that has been leading median home price declines the last two years. Bank-owned properties have flooded many markets in California, Arizona and Nevada, fueling the home price declines, but stoking sales.

Las Vegas, Phoenix, Los Angeles, San Diego and San Francisco were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.

They also were among the top 10 U.S. metros to post the sharpest median price declines in March, according to the report which analyzed all home sales recorded in the metropolitan statical areas by all local agents, regardless of company affiliation.

Prices rose in only one Western market: Anchorage, Alaska. The median price there climbed nearly 8 percent to $242,500.

Elsewhere in the region, sales fell last month in Seattle, Honolulu, Portland, Albuquerque, N.M., Denver, Boise, Idaho, Anchorage and Billings, Mont.

Among the markets in the AP-Re/Max report, Las Vegas posted the sharpest increase in home sales last month, with sales almost doubling over March 2008.

The metro area's median home price tumbled about 42 percent to $135,723.

The inventory of homes on the market has fallen 41 percent since March last year.

Investors looking for cheap properties to rent out have snatched up many of them.

Brad Snyder, an agent with ZipRealty in Sin City, said 60 percent of his business stems from real estate investors, while 30 percent are first-time homebuyers. The rest are move-up buyers.

Most of the investors he's dealt with hail from California and pay cash.

"The biggest difference between now and the investors from '04 is these investors are buying them in full cash, and in '04 it was everyone buying them with zero-down loans," Snyder said.

Snyder said his sales — all involving distressed properties — were up more than 100 percent versus March 2008. It looks like April will be even better than last year.

"Prices are still dropping, but sales traffic has been just through the roof," Snyder said.

In the San Francisco Bay area county of Alameda, where the median price of a home was above $600,000 just two years ago, foreclosed homes for half that amount are drawing multiple offers and sparking bidding wars reminiscent of the housing boom.

"The majority of transactions are distressed (properties)," said Joe Bega, an agent with ZipRealty who covers the San Francisco market. "It's a crazy market."

After putting down offers on more than 10 homes and losing out to other buyers who paid in cash or offered more, Michelle Hensley and her husband finally landed a home last month in San Lorenzo, about 24 miles east of San Francisco.

The 1,300 square-foot, three-bedroom, one and a half bath home was listed at $295,000. Hensley, 27, offered $300,000.

"We'd been putting offers over the asking price to get more of a chance of them accepting our offer," said Hensley.

The criminalist said she and her husband decided to buy a home now because prices have fallen enough to make it affordable.

"Houses are now within our reach, as opposed to a couple of years ago, when we probably couldn't even think about buying," she said.

The decline in home prices in Phoenix prompted Aaron Carter and his wife, Andrea, to say goodbye to their life as renters.

The couple entered escrow last week on a 1,200 square-foot, three-bedroom, two-bath home that's twice as large as their apartment.

"I'm a musician and I'm constantly trying to figure out how to fit a drum set, a piano and three guitars in a 600 square-foot apartment," Aaron Carter said. "Getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple to get a house."

The monthly payment on the $101,000 bank-owned home will work out to be about $740, or about $125 more than they pay in rent now, he said.

The couple, which agreed to put down $4,700, also are counting on the $8,000 first-time homebuyer tax credit enacted into law in February to help cover costs.

"We're going to have to budget pretty tightly," he said.

In Phoenix, sales shot up more than 81 percent in March, while the median sale price fell about 44 percent to $119,000, according to the AP-Re/Max report.

Neil Brooks, an agent with Century 21 Arizona Foothills in Scottsdale, Ariz., said foreclosure listings are dominating the Phoenix market and setting the pace for sales.

"The prices are really making the market," Brooks said, noting his traffic is ahead of this time last year. "People are sensing the bottom, especially in the low end (homes), because there are multiple offers on housing."

Seattle led the region with the steepest drop in sales last month, a decline of 37 percent. Its median home price slid about 13 percent to $294,950, according to the AP-Re/Max report.

Still, transactions jumped about 30 percent from February.

Douglas Lovitt, a broker and branch manager at Century 21 North Homes Realty in Lynnwood, Wash., said he saw his pending sales jump 70 percent last month versus a year ago.

He attributes the spike partly to the traditional spring surge in home buying, but also credits low mortgage interest rates. In mid-March, the average rate for a 30-year, fixed mortgage slipped below 5 percent and has remained there ever since.

"The interest rates are so good right now, how could you pass up those kinds of rates," Lovitt said.

Most of the buyers Lovitt is seeing these days are first-time buyers, but homeowners looking to trade up to a bigger home also have been buying homes, he says.

The only glitch is homeowners are still having to wait a while before they can sell their homes.

"In this area we're seeing extended market times," Lovitt said, "there's just no getting away from that."

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