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RealtyTrac: Tight supply dampens U.S. home sales


 Home-sale activity dropped for the fourth consecutive month and decreased in 31 states. But don't blame the weather, according to RealtyTrac. 

Fewer institutional investors are snapping up homes and fewer distressed homes are available to buy, the firm said. 

“Supply and demand have reached a bit of a standoff in this uneven real estate recovery,” said Daren Blomquist, vice president at RealtyTrac. “The supply of distressed properties — which buyers and investors have come to rely on over the past few years — is evaporating quickly in most markets, but that dwindling supply is not being adequately replenished by nondistressed homeowners listing their homes or by new homes being built."

Year over year, February's home-sale volume was down in six states, including Massachusetts, California, Arizona and Nevada, and 21 of the 50 largest metropolitan areas, according to RealtyTrac.  

Institutional investors were a key source of demand over the past two years, and typically purchased single family homes for rentals. But investors are now buying fewer properties. "It’s not yet clear if that diminishing demand will be filled by first-time homebuyers and move-up buyers,” Blomquist said

Home prices also dropped. The national median sales price of U.S. residential properties — including both distressed and nondistressed sales — was $164,667 in February, down 1 percent from the previous month but up 4 percent from February 2013. February marked the 20th consecutive month where the U.S. median price increased or stayed flat annually, but it was the second consecutive month with a monthly decrease.

“The last half of 2013 did not have nearly as much buyer demand as we’ve been seeing so far in the first half of 2014,” said Craig King, COO of Chase International, covering Nevada's Lake Tahoe and Reno markets. “Last year distressed property sales mostly disappeared from our marketplace. This year we are finding that agents who have historically handled the largest numbers of short sales are reporting that they have moved away from short sales because there just aren’t that many in our area.”

Sales of bank-owned properties nationwide accounted for 9.7 percent of sales, up from 9.3 percent in January but down from 11.1 percent a year ago. Metro areas with the highest percentage of bank-owned sales in February included Cleveland (29.8 percent), Stockton, Calif. (25.5 percent), Las Vegas (25.4 percent), Detroit (23.0 percent), and Jacksonville, Fla. (21.1 percent).

“Bank-owned property sales in Salt Lake County accounted for 3.6 percent of homes sold and accounted for less than 1.5 percent of homes sold in the Park City resort areas of Summit County,” said Steve Roney, CEO of Prudential Utah Real Estate, covering the Salt Lake City and Park City, Utah markets.  


 

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