Foreclosed home listing prices in the Midwest maintained their affordable levels last month, based on a study of residential real estate prices in the Midwest in May.
Median sales prices for existing homes in the Midwestern cities decreased to $145,800, a 10 percent drop from May 2008. But because of high unemployment levels, overall home sales declined by 8.5 percent compared to sales in May 2008.
Nationwide, median sales prices for previously owned homes declined to $173,000, a drop of 17 percent. Total sales of previously owned homes, including those from foreclosed home listing inventories, decreased by nearly 7 percent.
While home affordability levels are maintained in the Midwest, cities have been struggling with difficulties in the automobile and manufacturing industries. Sales of previously owned houses, including properties from foreclosed home listing inventories, decreased in ten of the 12 largest Midwestern metro housing markets tracked by housing analysts.
As pre-owned home sales fell, median sales prices for pre-owned homes also fell in ten of the metro housing markets. Sales figures were culled from all home sales completed and recorded in the metro areas.
Home sales dropped by over 20 percent in 5 of the 10 cities with decreased sales. These are Fargo in North Dakota, Wichita in Kansas, Kansas City in Missouri, Indianapolis and Chicago.
In Indianapolis, sales of pre-owned homes fell by 22 percent in May compared to May last year, but the median home price and foreclosed home listing price remained at $125,000.
Realtors in the area said the number of first-time buyers participating in the market is increasing, just like in other cities across the nation. First time buyers want to take advantage of the federal tax credit, which is set to expire in November this year, and lower mortgage rates, which may increase if the federal government does not intervene.
Midwestern realtors said that the percentage of first time buyers in the region increased from 50 percent in May 2008 to 70 percent in May.
Realtors in Indianapolis added that first time buyers and investors have also become interested in properties in rural communities outside the city.
The two Midwestern cities with home price increases in May were Fargo, where the median price rose to $140,500, and Des Moines, where the median rose to $184,645.
The increase in number of first time buyers had increased total sales of previously owned houses in the Midwest, including homes from foreclosed home listing inventories, in the price range of $150,000 to $200,000.
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