First Time Homebuyers Accounted for Half of First Quarter Sales

First-time homebuyers accounted for half of all existing-home purchases during the first quarter, according to the National Association of Realtors.

And those sales don’t reflect the impact of the homebuyer tax credit, which could boost sales by another 100,000 units or more this year.

“Close to 455,000 buyers purchased their first home during the first quarter, and those are likely just the first wave of new buyers coming into the market – they’re critical for a housing recovery,” said NAR chief economist Lawrence Yun.

Unfortunately, the median sales price continues to slide, falling 13.8 percent from a year ago to $169,000.

Amazingly, the median home price has increased 21.1 percent in the Cumberland area of Maryland and West Virginia from to a year ago.

However, the national drop is probably exaggerated thanks to a large proportion of distressed sales (nearly half of all sales in the first quarter), which tend to sell for 20 percent below market.

“In areas with the biggest price declines, we also see much higher levels of distressed sales which are distorting the data,” Yun said.

“We are very much in a bifurcated market with sharp differences between foreclosures and short sales on one hand, and traditional homes on the other.”

Illustrating that point is the fact that home sales were up 116.8 percent from a year ago in hard-hit Nevada, 80.6 percent in California, and 50 percent in Arizona.

The rate of existing-home sales nationwide in the first quarter was down 3.2 percent from the fourth quarter and 6.8 percent from the first quarter of 2008.

Prices still look to be coming down, but as evidenced from the data above, it really varies by local market.