Existing home sales in Atlantic County dropped about 8 percent last month from May 2011, and monthly sales were mixed throughout the region, according to local Multiple Listing Service data.
Nationally, sales of previously owned homes fell 1.5 percent in May to a seasonally adjusted annual rate of 4.55 million, the National Association of Realtors reported Thursday.
Despite the dip, May sales were about 10 percent higher than the same period last year, but are still far below the 6 million units per year that would represent a healthy market.
Residential sales in the region were coming off a strong spring, bolstered by warm weather, historically low mortgage rates and buyers wanting to close on vacation-homes by summertime.
In May, 294 homes sold in Cape May County that were on the Multiple Listing Service. That was five fewer homes than in April, but the figures were 10 percent above sales in May 2011.
The 61 Cumberland County resales were about the same as May 2011, although last month’s sales surpassed April’s.
Anthony D’Alicandro, president of the Atlantic City and County Board of Realtors, attributed some of the May decrease to declining inventory, particularly from a backlog of foreclosed and distressed properties that will start hitting the market in the next year.
“I believe the reason we saw a little bit of a year-over-year slip was because the market remains low on good inventory,” he said.
Some cash-paying investors may be waiting for those distressed properties to become available, he said. Those properties — sometimes vacant for several years — may also require significant home improvement work to restore, he said.
Cash transactions have declined slightly while financed purchased have started to rise, he said.
Nationally, May’s housing inventory represented a supply of more than six months, according to the National Association of Realtors. A year ago it was about nine months.
And distressed homes accounted for 25 percent of May sales nationally, down from 31 percent in May 2011.
In Ocean City, 85 residential homes and condominiums listed through MLS were sold in May, 12 more units than in May 2011.
Joan Farrell, office manager and agent at Monihan Realty Inc. in Ocean City, said there are currently more than 800 residential properties on the market throughout the city, a sign that inventory levels have dropped from their height of about 1,500 in 2006.
“It means most of the properties on the market are owners who truly want to sell,” she said.
Meanwhile, mortgage rates continue to drop. The average rate on a 30-year fixed mortgage fell this week to 3.66 percent, a new average low, Freddie Mac reported Thursday. This time last year, the average was 4.5 percent.
While the rates may attract investors, they have been offset by tough lending practices that require better credit and a bigger down payment, Farrell said.
“It takes better credit and more cash to buy now than it did before,” she said.
George Frick,cq owner of Century 21 Frick Realtors in Galloway Township, said he has seen home prices drawing buyers who had previously been priced out of the market during the bubble.
“There are homes in the low $100,000 to $140,000 range. Three-bedroom, one-bath ranchers that will need a little TLC, but that people would not have been able to purchase five, six years ago,” he said.
“I tell homeowners — and we’re seeing this right now — if the homeowners have a home priced right, marketed properly, and it shows nice, they can sell it fairly quick,” he said. “And we’re even getting multiple offers. We haven’t seen that in a while. If you want it sold, you have to realistic in today’s market.”
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