Existing-home sales dipped 0.6 percent in February, but are up 7 percent compared to the same month last year, according to a report by the National Association of Realtors.
Sales of resale homes, which include single-family, townhomes, condominiums and co-ops, fell to a seasonally adjusted annual rate of 5.02 million units last month, down from January’s rate of 5.05 million units, though were up from the 4.69 million unit rate in February 2009, the report said.
The monthly decrease was driven by a 1.4 percent month-to-month decline in single-family home sales, which make up the vast majority of existing home sales. Sales of resale condos and co-ops, meanwhile, rose 4.8 percent month-to-month. They also rose 30.3 percent year-over-year, compared to a 4.3 percent increase for single-family homes.
While the association pointed to winter storms as partially to blame for the month-to-month drop, "the housing recovery is fragile at the moment," said Lawrence Yun, the association’s chief economist.
Resale housing inventory increased 9.5 percent month-to-month, to 3.59 million existing homes, but fell 5.5 percent year-over-year, the report said. At the current sales pace, that’s an 8.6-month supply, compared to a 7.8-month supply in January. A six-month supply represents an equilibrium between a buyer’s market and a seller’s market, with a higher inventory representing a buyer’s market.
The association noted the approach of an important deadline for a federal homebuyer tax credit program — a purchase contract must be signed by April 30 and the sale must close by June 30 to be eligible for the credit.
"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 homebuying 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 fell 1.8 percent year-over-year in February, to $165,100 from $168,200 in February 2009. More than a third (35 percent) of existing-home sales last month were for distressed properties, which are "generally sold at discount," the report said.
The vast majority, 72 percent, of existing homes were sold for under $250,000. Homes above $750,000 saw the biggest year-over-year gains, however, with homes between $750,000 and $1 million seeing a 39.6 percent increase while homes above $1 million saw a 35.5 percent increase. In contrast, the median price of homes under $100,000 rose about 3.1 percent year-over-year. …CONTINUED
First-time homebuyers made up 42 percent of purchasers, while investors made up 19 percent and repeat buyers made up 39 percent of total buyers, according to a NAR practitioner survey.
Regionally, existing home sales in the Northeast and Midwest rose 2.4 percent and 2.8 percent month-to-month, respectively; and each also rose year-over-year, 12 percent and 8.8 percent, respectively.
These gains did not make up for the month-to-month declines in the South and West, however, which saw drops of 1.1 percent and 4.7 percent, respectively. Each rose year-over-year: 6.9 percent and 3.4 percent, respectively. Together, both regions make up 61 percent of the total inventory of existing homes.
"A lack of affordable housing inventory is holding back sales and pressuring prices to be bid upwards in many California markets," Yun said.
A separate report by the California Association of Realtors noted that existing single-family home sales in the Golden State fell 11.7 percent year-over-year in February to a seasonally adjusted rate of 528,930 units.
At the same time, the statewide median price rose 14.1 percent year-over-year, to $279,840, while unsold inventory fell to 6.3 months compared to 7.1 months in February of last year, the report said.
"Sales of distressed properties to investors and first-time buyers continued to drive the market in February, although at a lesser rate than a year ago," said Leslie Appleton-Young, the association’s vice president and chief economist.
"Supply continues to lag demand at the more affordable end of the market, with a 3.9-month supply of homes for sales priced below $300,000, compared with the long-run average of more than seven months. This contrasts sharply with the nearly 15-month supply of homes for sales priced at $1 million or more at the upper end of the market."
A supply of six months is generally indicative of a balanced market, with a supply greater than six months possibly indicating a buyer’s market and a supply of less than six months possibly indicating a seller’s market.
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