March 23, 2009
One month does not a housing recovery make, but home sellers and real estate agents are a bit more hopeful today, after the National Association of Realtors reports sales of existing homes rose 5.1 percent in February over January's total.
While the numbers are encouraging, the NAR points out February sales are still 4.6 percent below February 2008 levels. The numbers, they say, reflect additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect. Most of last months sales occurred in lower-priced properties.
"Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February," said Lawrence Yun, NAR's chief economist. "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 and conditions were close to normal; the median is where half of the homes sold for more and half sold for less.
"Given the downward distortion in price comparisons due to distressed sales, it's important for owners to keep in mind that this doesn't equate to a similar loss of value for traditional homes in good condition," Yun said.
Yun said a recovery in the West is much stronger than expected, with strong sales gains led by California, where the median listing price is beginning to rise for the first time in three years.
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 supply3 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.
Single-family home sales rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February from a level of 4.05 million in January, but are 3.6 percent below the 4.39 million-unit pace in February 2008. The median existing single-family home price was $164,600 in February, down 15.0 percent from a year ago.
Existing condominium and co-op sales increased 11.4 percent to a seasonally adjusted annual rate of 490,000 units in February from 440,000 units in January, but are 13.1 percent lower than the 564,000-unit pace a year ago. The median existing condo price4 was $172,200 in February, which is 18.7 percent lower than February 2008.
Regionally, existing-home sales in the Northeast jumped 15.6 percent to an annual pace of 740,000 in February, but are 14.9 percent below February 2008. The median price in the Northeast was $251,200, down 4.8 percent from a year ago.
Existing-home sales in the Midwest increased 1.0 percent in February to a pace of 1.04 million but are 14.0 percent lower than a year ago. The median price in the Midwest was $131,000, which is 7.8 percent below February 2008.
In the South, existing-home sales rose 6.1 percent to an annual pace of 1.74 million in February but are 11.2 percent below February 2008. The median price in the South was $146,700, down 10.0 percent from a year ago.
Existing-home sales in the West increased 2.6 percent to an annual rate of 1.20 million in February and remain 30.4 percent higher than a year ago. The median price in the West was $204,600, which is 30.3 percent below February 2008.
