Home sales in the Northeast surged in November as droves of first-time buyers rushed to take advantage of a federal tax credit, but the median price fell the most of any U.S. region.
The nine-state region registered 79,000 home resales last month, up 55 percent from a year ago, the National Association of Realtors said Tuesday. The median price regionally, however, tumbled about 13 percent to $223,400, the worst decline of any region.
Nationally, sales of existing homes jumped 46 percent from November of last year, without adjusting for seasonal factors. The median sales price fell 4 percent to $172,600.
The New York City metro area lagged behind the rest of the nine-state block, but still posted an increase of 37 percent from a year earlier. The median price for the area fell more than 3 percent to $382,000.
While the tax credit helped to spur some of the activity last month, many buyers in her area didn't qualify under the original income limits, said Miriam Bernstein, an agent with Re/Max Prime Properties in Scarsdale.
First-time home buyers made up half of all buyers nationally, the NAR said. Many hurried to get under a deadline to qualify for an $8,000 tax credit that was set to expire at the end of last month. Congress now has extended and expanded the credit through April.
Buyers who have owned their current homes for at least five years are eligible for a tax credit of up to $6,500, while first-time home buyers - or anyone who hasn't owned a home in the last three years - can still get up to $8,000.
Diffley expects the recovery to firmly take hold in the middle of next year, with the Northeast in lockstep with the rest of the country. The biggest concern for Northeast housing in the future is unemployment.
The jobless rate in the Northeast dropped to 8.7 percent in November from 9 percent in October, the Labor Department said last week - the lowest rate regionally in the nation. But that's up from 6.2 percent a year ago.
Home sales in all nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report jumped by double digits last month. The report, also released Tuesday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.
Here are some highlights from the region:
Biggest sales gain. Home sales in Philadelphia surged more than 78 percent in November as first-time homebuyers rushed into the market.
"It was crazy," said Stephanie Somers of Re/Max Access in Philadelphia. "But since the credit was extended, we've seen a lot of settlements postponed until December.
Some buyers have put it on the back burner until next year." The median home price, however, slipped more than 2 percent to $205,000 during the month.
Biggest price gain. Pittsburgh again clocked in the largest price increase in the region, at nearly 3 percent. Its median price of $117,950 is the lowest in the Northeast and attractive to first-time homebuyers who flooded the market last month.
"I've seen people moving back to Pittsburgh from other areas," said Christa Ross with Re/Max Select Realty in Cranberry Township, Pa.
Sales in Pittsburgh were up almost 57 percent from last year.
Activity waned after the credit was extended, though Ross expects it to pick up again after the new year.
Biggest price decline. The median price in Augusta, Maine, dropped by nearly 7 percent to $130,000 as the city battled foreclosures.
In a normal year, the area sees five to 10 foreclosures, said Don Plourde with Coldwell Banker Plourde Real Estate in Waterville, Maine. This year, the total is about 50 and more are on the way.
"When a driveway hasn't been plowed for the last three snowstorms, you know people have abandoned the home and it will be coming on the market," Plourde said.
However, sales are strong, increasing 56 percent over the prior year. The federal tax credit and a state tax credit have been a boon to the market, Plourde said. Maine offered a tax credit of up to $5,000 or 4 percent of the mortgage amount for first-time homeowners. It expired at the end of November and was replaced by a $2,500 grant.
Inventory highlight. Seven of the nine cities registered double-digit decreases in the number of unsold homes on the market.
Manchester, N.H., led the way with a decline of 24 percent.
Industry experts say a decline in inventory is key to a sustainable housing recovery.