Existing Home Sales Off 3.6 Percent in February
Existing-home sales remained flat in February, off 3.6 percent from year-ago numbers, according to data released today by the National Association of Realtors. Total existing-home sales came in at a seasonally-adjusted annual rate of 6.69 million units in February, compared to a 6.94 million-unit pace in February 2006. The realtor trade organization mistakenly characterized February's sales numbers as a "strong" rise, pointing to monthly gains in a press statement -- most economists, however, benchmark adjusted sales performance against year-ago numbers. Nonetheless, the monthly rise in sales that prompted the NAR's jubilant-yet-incorrect statement was the biggest monthly rise recorded in three years, providing strong evidence that a housing recovery may be in the offing. David Lereah, NAR's chief economist, said February's results came as a surprise. "Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically-low mortgage interest rates and competitive pricing by sellers," he said. "Even so, winter storms last month discouraged shopping, and buyers were chilled with the third coldest February on record. These unusual weather patterns mean home sales that close in March may decline before rebounding later this spring." The national median existing-home price for all housing types was $212,800 in February, down 1.3 percent from February 2006 when the median was $215,700. The median is a typical market price where half of the homes sold for more and half sold for less. Taking aim at the drop in median prices, NAR president Pat Vredevoogd Combs, himself a realtor, said the median home price currently is distorted and shouldn't be relied upon as an indicator of market condition. "Over the last year, we've seen declining sales in many high-cost areas but rising activity in lower cost markets," she said. "This change in the geographic composition of sales means we aren't getting apples-to-apples comparisons in median home prices from a year ago." The NAR made no such claims regarding the lack of validity of its measure of median prices during the housing boom. Total housing inventory levels rose 5.9 percent at the end of February to 3.75 million existing homes available for sale, which represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January. Raw inventories peaked last July at 3.86 million, and supplies topped at 7.4 months in October. Single-family home sales increased 3.7 percent to a seasonally adjusted annual rate of 5.88 million in February from 5.67 million in January, but are 3.4 percent below the 6.09 million-unit pace in February 2006. Existing condominium and co-op sales jumped 5.3 percent to a seasonally adjusted annual rate of 810,000 units in February from a level of 769,000 in January, but are 5.2 percent below the 854,000-unit pace in February 2006. The median existing condo price was $225,400 in February, up 0.5 percent from a year earlier. Regionally, existing-home sales in the Northeast surged 14.2 percent to a level of 1.21 million in February, and are 3.4 percent higher than February 2006. The median existing-home price in the Northeast was $265,900, down 1.4 percent from a year earlier. In the Midwest, existing-home sales rose 3.9 percent in February to a level of 1.58 million, but are 1.9 percent below a year ago. The median price in the Midwest was $157,000, down 1.3 percent from February 2006. Existing-home sales in the South increased 1.6 percent to an annual sales rate of 2.58 million in February, but are 4.4 percent below February 2006. The median price in the South was $175,900, down 2.9 percent from a year ago. Existing-home sales in the West were unchanged in February, holding at an annual pace of 1.32 million, and are 9.6 percent lower than a year ago. The median price in the West was $337,100, up 2.2 percent from February 2006.