Sales of single-family homes and condominiums in August hit an eight-year high nationally, and some cities are on pace to see their best sales numbers in a decade, according to RealtyTrac’s August 2015 U.S. Home Sales Report.
According to the report, sales of single-family homes and condos in August increased 5.4 percent from the same period last year, with nearly 1.95 million homes sold — the highest total for the first eight months of the year that RealtyTrac has reported since 2007, when there were nearly 2.12 million sales.
Certain local markets are experiencing particularly steady home sales, RealtyTrac said. Out of 204 metro areas surveyed, 58 are on track to reach nine-year highs in home sales this year, and another 22 cities are poised to reach 10-year highs.
Cities posting the biggest year-over-year gains in home sales volume in August were:
- Salt Lake City (up 31.6 percent)
- Portland (up 22.2 percent)
- Minneapolis-St. Paul (up 19.2 percent)
- Jacksonville, Florida (up 16.6 percent)
- Seattle (up 16.2 percent)
- Nashville (up 16.1 percent)
- Charlotte, North Carolina (up 15.9 percent)
- San Antonio, Texas (up 15.9 percent)
- San Diego (up 12.7 percent)
- Tampa, Florida (up 11.5 percent)
“The continued strength in sales volume across a wide spectrum of markets in August indicates that shockwaves from recent global stock market instability have not weakened the housing recovery, and in fact, there is evidence that the instability has fueled more demand for U.S. real estate,” said Daren Blomquist, vice president of RealtyTrac.
In addition, the share of cash sales nationwide in August bounced back from a seven-year low in July, Blomquist said. All-cash sales accounted for 24.5 percent of all single family home and condo sales in August, up from a seven-year low of 23.6 percent in July, but still down from 26.7 percent of all sales in August 2014 and down from a peak of 39.6 percent of all sales in February 2013.
The month-over-month increase in cash sales share was more pronounced in markets that have traditionally been magnets for foreign cash buyers, including Boston, Las Vegas, San Francisco, Seattle and New York, said Mark Hughes, chief operating officer of First Team Real Estate, which covers the Southern California market.
“We are seeing more globalization as Southern California has become a destination for international buyers,” Hughes said.
“Eighty percent of new construction in Irvine last year was sold to Chinese buyers. International buyers are driving home prices up and sometimes out of reach for many local residents.”
“We are seeing more globalization. International buyers are driving home prices up and sometimes out of reach for many local residents.” – Mark Hughes, chief operating officer of First Team Real Estate
But it wasn’t just cash buyers that kept home sales volume strong in August, Blomquist said. The share of buyers using FHA loans in August increased 30 percent from a year ago, and the year-over-year increase in the share of FHA buyers was 50 percent or more in markets such as Nashville, Phoenix, Colorado Springs, Portland and San Diego, he said.
“Those markets with a solid and fast-growing share of FHA buyers are poised for longer, more sustainable growth going forward than markets that are more dependent on capricious cash buyers,” Blomquist said.
Cities not faring as well in RealtyTrac’s analysis were Cleveland, Ohio, where year-over-year sales decreased 13.8 percent; Baltimore, which reported a 12.1-decrease; Cincinnati, Ohio, which is down 11.8 percent; Chicago, which is down 10.4 percent; and New York, which is down 10.1 percent.
Sales of distressed homes, including those in the foreclosure process and bank-owned properties, decreased slightly from 9.3 percent in July to 8.9 percent in August, and significantly from last year’s report of 12.2 percent. This is the lowest level of distressed homes that RealtyTrac has reported since it began collecting distressed sales data in January 2000.
Still, some cities are seeing an increase over their share of distressed home sales, RealtyTrac said. Since last year, Boston has seen its share of distressed homes increase 75 percent; Milwaukee, Wis., 16.1 percent; and Tampa, Jacksonville and Orlando, Fla., all 15.4 percent each.
