After three straight months of increases, sales of existing homes dropped in February, according to a report from the National Association of Realtors.
"Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," said Lawrence Yun, NAR’s chief economist, in a statement.
"This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July."
Completed sales of single-family, townhomes, condominiums and co-ops in February fell 9.6 percent compared to January and 2.8 percent compared to February 2010, to a seasonally adjusted annual rate of 4.88 million. January’s sales rate was revised upward to 5.4 million, boosted by sales to investors and cash buyers.
In a separate NAR survey, cash buyers made up a record 33 percent of sales in February, up from 32 percent in January and 27 percent in February 2010. Sales to investors made up 19 percent of sales, down from 23 percent in January and flat from the same month a year ago.
First-time homebuyers accounted for 34 percent of sales in February, up from 29 percent in January, but down from 42 percent in February 2010 when a first-time homebuyer tax credit program was in effect.
Distressed homes, typically sold at a discount, accounted for 39 percent of sales last month, a rise from 37 percent in January and 35 percent in February 2010. That rise helped drive down the national median existing-home price to $156,100, a 5.2 percent year-over-year drop.
"The decline in price corresponds to the record level of all-cash purchases where buyers — largely investors — are snapping up homes at bargain prices," Yun said. "We’d be seeing greater numbers of traditional homebuyers if mortgage credit conditions return to normal."
According to the report, unsold inventory rose 3.5 percent last month, to 3.49 million, a supply of 8.6 months at the current sales pace. A six-month supply is generally considered to be an even balance between a buyer’s market and a seller’s market.
The rate for a conventional 30-year fixed mortgage was 4.95 percent in February, up from 4.76 percent the month before, but still slightly lower than the rate for February 2010.
Sales in the Midwest saw the worst decline in existing sales, 12.2 percent month-to-month and 9 percent year-over-year, to an annual rate of 1.01 million. Median price in the region fell 5.4 percent, to $122,000.
In the Northeast, sales fell 7.2 percent month-to-month and 8.3 percent year-over-year, to 770,000. The region saw the biggest median price decrease, 9.5 percent, to $230,200.
In the South, sales dropped 10.2 percent month-to-month, to 1.84 million, but remained flat compared to February 2010. Median price fell 3.9 percent, to $134,600.
In the West, sales fell 8 percent month-to-month and 2.4 percent year-over-year, to a rate of 1.26 million. Median price fell 5.2 percent, to $190,000.
|Metropolitan statistical area||Median price Feb. 2010||Median price Feb. 2011||Annual change in price||Annual change in sales|
|New York-Northern New Jersey-Long Island||380,000||376,700||-0.9%||0.0%|
Source: National Association of Realtors
In a separate report from the California Association of Realtors, sales in the state under contract but not yet closed rose month-to-month in February, but fell slightly year-over-year. The association’s pending home sales index rose 20.6 percent from January and fell 1.6 percent from February 2010, to 112.1. An index of 100 is equal to the average level of contract activity in 2008, the index’s base year.
"The increase in pending sales is typical for this time of year, as we usually see a seasonal improvement in the spring," said Beth L. Peerce, CAR’s president, in a statement.
Distressed homes accounted for 56 percent of sales in California, up slightly from 54 percent in January and 55 percent in February 2010. REO (bank-owned) properties made up a third of sales.
Median sale price varied dramatically based on whether the property was nondistressed or sold as a foreclosure or short sale. The median for nondistressed properties was $370,000. Short sales sold for 34.5 percent less, at a median $275,000. REO properties saw a whopping 85.1 percent discount from the nondistressed median price, at a median $199,900.
Source: California Association of Realtors