Existing Home Sales Boosted by Price Discounts
Existing-home sales jumped in February, reversing losses in January, according to the National Association of Realtors. Even so, sales activity remains relatively soft, NAR said, reflecting additional layoffs and apprehensive buyers. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from 4.49 million units in January, which is 4.6 percent below the 4.95 million-unit level in February 2008. Lawrence Yun, NAR chief economist, said first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges. “Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he said. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.” The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800, according to NAR. Although, California's median listing price actually started to rise in February for the first time in three years, showing a stronger than expected improvement in the West. Single-family home sales rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February, but are 3.6 percent below the 4.39 million-unit pace at the same time last year. Existing condominium and co-op sales increased 11.4 percent to a seasonally adjusted annual rate of 490,000 units in February. The median existing condo price was $172,200, which is 18.7 percent lower than last year at the same time. Regionally, existing-home sales in the Northeast climbed 15.6 percent to an annual pace of 740,000 in February, 14.9 percent below February 2008. Existing-home sales in the Midwest increased 1.0 percent to 1.04 million. In the South, existing-home sales rose 6.1 percent to an annual pace of 1.74 million in February, while sales in the West increased 2.6 percent to an annual rate of 1.20 million in February -- and remain a whopping 30.4 percent higher than a year ago. The median price in the Northeast was $251,200, down 4.8 percent from a year ago. The median price was 131,000 in the Midwest, $146,700 in the South, and $204,600 in the West, which is 30.3 percent below February 2008. Total housing inventory at the end of February rose 5.2 percent to 3.80 million existing homes available for sale, which represents a 9.7-month supply at the current sales pace, unchanged from January. In the six months prior to February, the total number of homes for sale had steadily declined from a record level last July, according to the Associations findings. Despite the welcomed boost in sales, and the fact that seasonal adjustment factors are more volatile in winter months, sales rates over the past few months still show dampened activity, NAR's report concluded. Write to Kelly Curran at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.