WASHINGTON, DC (May 21) – Despite media reports of
the emergence of so-called “bidding wars" in select housing markets,
average home prices remained flat in the month of April, according to
the latest results of the monthly Campbell/Inside Mortgage Finance
HousingPulse Tracking Survey.
While reports of some home listings attracting
dozens of offers have become common this year, the closely-watched
nationwide HousingPulse survey data found that most homes sold
in April received only two or three offers and sold for below list
Average prices for home purchases declined slightly
from March to April, according to transactions reported by
HousingPulse survey respondents. The average price for
non-distressed properties declined 1.5% from March to April, while the
average price for short sales dipped 1.7%. For damaged REO the average
price fell 1.4% and for move-in ready REO the average price slipped
The average number of offers for non-distressed
properties sold in April was only 1.9, according to the nationwide
sample. For damaged REO, move-in ready REO, and short sales,
comparable offer statistics were 3.5, 3.1, and 3.0, respectively.
Despite random reports of homes being sold above
list price, comprehensive HousingPulse survey statistics show
that average ratios of sales prices to listing prices continued to be
below 100% in the month of April. Average sales prices were below list
prices for all four categories of properties covered by the
survey—non-distressed, damaged REO, move-in ready REO, and short
sales. For example, non-distressed properties sold for 95% of list
price in April, on average, a metric that has not changed
substantially for the past two years.
One factor continuing to hold home prices down is
the high share of distressed properties, especially short sales. The
total share of distressed properties in the housing market in April,
as represented by the HousingPulse Distressed Property Index
(DPI), was 47.9%, using a three-month moving average. This was the
26th month in a row that the DPI has been above 40%.
Even when potential homebuyers bid up property
prices above list price, appraisals required for mortgage financing
prevented transactions from closing at higher prices. “Yes, we are
experiencing bidding wars on desirable properties, but many times the
appraisals don't come in at the [contract] price. The appraisers are
keeping the [transaction] prices down even when buyers see the value
and are willing to pay more,” complained one real estate agent
responding to the HousingPulse survey.
The Campbell/Inside Mortgage Finance
HousingPulse Tracking Survey involves approximately 2,500 real
estate agents nationwide each month and provides up-to-date
intelligence on home sales and mortgage usage patterns.