Existing Home Sales Decline for Third Straight Month

by AUSTIN KILGORE

Tuesday, March 23rd, 2010, 10:16 am
Existing home sales dipped in February, continuing a three-month-long run of declining sales activity, according to the National Association of Realtors (NAR).
The seasonally adjusted annual rate of finalized transactions for existing single-family, townhomes, condominiums and co-ops was 5.02m in February, down 0.6% from 5.03m in January, which started the year off down 7.2% from December. February’s rate was 7% higher than a year ago, when the annual rate for existing sales was 4.69m in February 2009.
The national median existing-home price for all housing types was $165,100 in February, down 1.8% from February 2009. Distressed properties accounted for 35% of sales last month.
NAR said modest gains in the Northeast and Midwest were offset by softer sales in the South and West.
Regionally, the annual rate of existing-home sales in the Midwest was 1.11m, up 2.8% from January and up 8.8% from February 2009. The median price in the Midwest was $128,000, down 2% from a year ago.
The annual rate in the Northeast was 840,000 in February, up 2.4% from January and up 12% over last year. The median price in the Northeast was $254,700, up 7.5% from February 2009.
In the South, the rate of existing home sales was 1.85m, down 1.1% from January, but 6.9% from February 2009. The median price in the South was $139,600, down 4.2% from February 2009.
In the West, existing home sales decreased 4.7% from January to an annual rate of 1.22m, which is 3.4% higher than February 2009. The median price in the West was $207,900, down 9.8% from a year ago.
NAR chief economist Lawrence Yun said existing sales have been higher than year-ago levels for eight straight months and home prices are stabilizing, but added the housing recovery is fragile. Yun added the widespread winter storms in February may be masking 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.
The nation’s existing home inventory was 3.59m in February, up 9.5% from January. That’s an 8.6-month supply, up from a 7.8-month supply in January.
“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.”
First-time homebuyers continue to dominate the market, accounting for 42% of all home sales in February, NAR said. Investors accounted for 19% of existing sales, while the remaining 39% were repeat buyers.
Sales in the single-family home segment of the existing home market were at an annual rate of 4.37m in February, down 1.4% from January’s rate of 4.43m, but up 4.3% from the rate of 4.19m in February 2009. The median existing single-family home price was $164,300 in February, down 2.1% from February 2009.
Existing condominium and co-op sales were at a rate of 650,000 in February, up 4.8% from the rate of 620,000 in January and up 30.3% from 499,000 in February 2009. The median existing condo price was $170,200 in February, down 0.2% from a year ago.
Write to Austin Kilgore.

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