While February’s existing-home sales didn’t quite measure up to expectations, they still bested February 2011’s sales and the median sales price gained a little ground, as well.
According to the National Association of Realtors, sales were up in the Midwest and South though down in the Northeast and West.
Total completed transactions that include existing single-family homes, townhomes, condominiums and co-ops, slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January, but are 8.8 percent higher than the 4.22 million-unit level in February 2011, NAR reports.
Lawrence Yun, NAR chief economist, says underlying factors have improved compared with a year ago.
“The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market,” he says. “Although relatively unusual, there will be rising demand for both rental space and homeownership this year. The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy.”
NAR President Moe Veissi says market conditions are improving.
“Supply and demand have become more balanced in more markets, but with tight supply in the lower price ranges – particularly in the West,” he says. “When markets are balanced, we normally see prices rise one to two percentage points above the rate of inflation, but foreclosures and short sales are holding back median prices.”
The national median existing-home price for all housing types was $156,600 in February, up 0.3 percent from February 2011. Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 34 percent of February sales (20 percent were foreclosures and 14 percent were short sales), down from 35 percent in January and 39 percent in February 2011.
“The bottom line is investors and first-time buyers are competing for bargain-priced properties in much of the country, with home prices showing signs of stabilizing in many areas,” Veissi says. “People realize that homeownership is an investment in their future. Given an apparent over-correction in most areas, over the long term home prices have nowhere to go but up.”
Regionally, existing-home sales in the West declined 3.2 percent to an annual pace of 1.22 million in February but are 6.1 percent above February 2011. The median price in the West was $195,300, up 3.1 percent from a year ago.
The NAR also reports that nationwide, pending home sales were down slightly in February but remain notably above the pattern in the first half of last year.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, eased 0.5 percent to 96.5 in February from 97.0 in January but is 9.2 percent above February 2011 when it was 88.4. The data reflects contracts but not closings.
Yun says the statistics reflect the continuation of an uneven but higher sales pattern.
“The spring home-buying season looks bright because of an elevated level of contract offers so far this year,” he says. “If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that’s what we’re expecting with sales rising 7 to 10 percent in 2012.”
In the West the index declined 2.6 percent in February to 99.3 and is 1.8 percent below February 2011.
Here’s a look at February’s existing single-family home sales by region and price: