Sales of previously owned homes rose 3.4 percent in April from March levels and were 10 percent higher than sales in the same month last year, the National Association of Realtors reported Tuesday.
Median prices were 10.1 percent higher than last year, but industry observers warned that the increase represented not a turnaround in values but fewer distressed properties in the mix.
Foreclosures and short sales (in which lenders agree to accept less than is owed on the mortgages) accounted for 28 percent of April sales, the association said, down from 29 percent in March and 37 percent in April 2011.
Foreclosures sold for an average discount of 21 percent below market value in April, while short sales were discounted 14 percent.
"Home prices can shoot up, among other reasons, if demand picks up sharply, if the proportion of distressed sales drops sharply, if the proportion of more expensive homes sold rises sharply, or some combination of these," said economist Patrick Newport, of IHS Global Insight in Lexington, Mass. "Without more information than contained in the report, however, it is impossible to tell what drove home prices up last month."
Realtors group's chief economist Lawrence Yun agreed that "a diminishing share of foreclosed-property sales is helping home values." He added, however, that in a few markets supply in some price ranges is not keeping up with demand, resulting in multiple bids on homes "and escalated price conditions."
He cited Washington, D.C., as one example, as well as the harder-hit foreclosure areas of Phoenix, Miami, and Orange County, Calif., where for the last year investors have gobbled up distressed housing as fast as it comes on the market, creating a shortage.
The eight-county Philadelphia region, which thus far has not been affected as dramatically by the six-year-old foreclosure crisis, was not mentioned in the Realtors' report, but there are similar shortages in some price ranges here.
The median sale price of a Philadelphia-area home in April was $200,000, according to Prudential Fox & Roach's HomExpert Market Report, up 3.9 percent from the $192,500 of April 2011 — perhaps more a reflection of an increase in value than distressed transactions, which have accounted for just 5 percent to 7 percent of total sales.
Long & Foster Real Estate associate broker Art Herling pointed to Springfield and Whitemarsh Townships in Montgomery County as being "almost in a sellers' market," with highest demand for houses priced at $250,000 to $300,000.
Upper Dublin and Abington, on the other hand, "are still locked in a buyers' market," said Herling, who is based in Blue Bell. He called Cheltenham, with 14 months' worth of for-sale inventory, an "extreme" buyers' market.
Prudential Fox & Roach agent Mark Wade observed that in Center City west of Broad Street, "anything under $300,000 is in short supply." In Old City, the same is true under $200,000, he said, while in Society Hill, homes priced at $500,000 to $1 million are "not plentiful."
"Since most of Philadelphia's inventory is not new construction … something that has been recently rehabbed, in mint condition with either parking or a strong zip code is perpetually in short supply," he said.