RISMEDIA, March 24, 2010—Existing-home sales declined slightly in February 2010, with modest gains in the Northeast and Midwest offset by softer sales in the South and West, according to the National Association of Realtors.
Existing-home sales, which are finalized transactions that include single-family, townhomes, condominiums and co-ops, slipped 0.6% nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January, but are 7.0% higher than the 4.69 million-unit pace in February 2009.
Lawrence Yun, NAR chief economist, said widespread winter storms in February may mask underlying demand. “Some closings were simply postponed by winter storms, but buyers couldn’t get out to look at homes in some areas and that should negatively impact near-term contract activity,” he said.
“Although sales have been higher than year-ago levels for eight straight months and home prices are much more stable compared to the past few years, the housing recovery is fragile at the moment.”
Total housing inventory at the end of February rose 9.5% to 3.59 million existing homes available for sale, which represents an 8.6-month supply at the current sales pace, up from a 7.8-month supply in January 2010. Raw unsold inventory is 5.5% below a year ago.
“The key test for a durable recovery comes in the next few months as the tax credit deadline approaches,” Yun said. “If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure a broad home price stabilization.”
The national median existing-home price for all housing types was $165,100 in February, which is 1.8% below February 2009. Distressed homes, generally sold at discount, accounted for 35% of sales last month.
A parallel NAR practitioner survey shows first-time buyers purchased 42% of homes in February, up from 40% in January. Investors accounted for 19% of transactions in February, compared with 17% in January; the remaining sales were to repeat buyers.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said some buyers are just beginning to realize the urgency of acting before the contract deadline for the tax credit. “If home buyers want this tax credit there is literally no time to waste,” she said.
“Most buyers spend several months looking at a dozen homes before they make a contract offer, but less than six weeks are left before the April 30 contract deadline. If you’re sure about the kind of home you want and the neighborhood where you’d like to live, you need to begin working with a Realtor now to help you find what you want, negotiate on your behalf and ensure that you meet the necessary deadlines, including loan qualification,” Golder said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dipped to 4.99% in February from 5.03% in January; the rate was 5.13% in February 2009.
Single-family home sales declined 1.4% to a seasonally adjusted annual rate of 4.37 million in February from a pace of 4.43 million in January, but are 4.3% higher than the 4.19 million level a year ago. The median existing single-family home price was $164,300 in February, down 2.1% from February 2009.
Existing condominium and co-op sales rose 4.8% to a seasonally adjusted annual rate of 650,000 in February from 620,000 in January, and are 30.3% above the 499,000-unit pace in February 2009. The median existing condo price was $170,200 in February, down 0.2% from a year ago.
Regionally, existing-home sales in the Northeast rose 2.4% to an annual pace of 840,000 in February and are 12.0% above a year ago. The median price in the Northeast was $254,700, up 7.5% from February 2009.
Existing-home sales in the Midwest increased 2.8% in February to a level of 1.11 million and are 8.8% higher than February 2009. The median price in the Midwest was $128,000, which is 2.0% below a year ago.
In the South, existing-home sales slipped 1.1% to an annual pace of 1.85 million in February but are 6.9% above a year ago. The median price in the South was $139,600, down 4.2% from February 2009.
Existing-home sales in the West fell 4.7% to an annual rate of 1.22 million in February but are 3.4% higher than February 2009. The median price in the West was $207,900, down 9.8% from a year ago.
“A lack of affordable housing inventory is holding back sales and pressuring prices to be bid upwards in many California markets,” Yun noted.
For more information, visit www.realtor.org.
