A Closer Look at February Existing-Home Sales Following Sustained Gains

Existing-home sales fell in February following three straight monthly increases, according to the National Association of Realtors®. Existing-home sales—completed transactions that include single-family, townhomes, condominiums and co-ops—dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010. Lawrence Yun, NAR chief economist, expects an uneven recovery. “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,” he says. “This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July.” A parallel NAR practitioner survey shows first-time buyers purchased 34 percent of homes in February, up from 29 percent in January; they were 42 percent in February 2010. All-cash sales were a record 33 percent in February, up from 32 percent in January; they were 27 percent in February 2010. Investors accounted for 19 percent of sales activity in February, down from 23 percent in January; they were 19 percent in February 2010. The balance of sales were to repeat buyers. The national median existing-home price for all housing types was $156,100 in February, which is 5.2 percent below February 2010. Distressed homes—sold at discount—accounted for a 39 percent market share in February, up from 37 percent in January and 35 percent in February 2010. “The decline in price corresponds to the record level of all-cash purchases where buyers—largely investors—are snapping up homes at bargain prices,” explains Yun. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.” NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., says buyers should look into loan availability as soon as they decide they want to buy. “Despite very affordable mortgage interest rates, credit remains a challenge—buyers should check their personal credit, and mortgage availability in their area,” says Phipps. “Realtors® are an excellent resource to learn about all of the marketplace factors, but in this tight credit environment it’s important to learn up-front what a lender might be willing to offer as well as specific programs that might be available in your location,” Phipps explains. Total housing inventory at the end of February rose 3.5 percent to 3.49 million existing homes available for sale, which represents an 8.6-month supply at the current sales pace, up from a 7.5-month supply in January. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.95 percent in February from 4.76 percent in January; the rate was 4.99 percent in February 2010. Single-family home sales fell 9.6 percent to a seasonally adjusted annual rate of 4.25 million in February from 4.70 million in January, and are 2.7 percent below the 4.37 million pace in February 2010. The median existing single-family home price was $157,000 in February, which is 4.2 percent below a year ago. Existing condominium and co-op sales dropped 10.0 percent to a seasonally adjusted annual rate of 630,000 in February from 700,000 in January, and are 3.1 percent lower than the 650,000-unit level one year ago. The median existing condo price was $150,400 in February, down 11.1 percent from February 2010. Regionally, existing-home sales in the Northeast fell 7.2 percent to an annual pace of 770,000 in February and are 8.3 percent below February 2010. The median price in the Northeast was $230,200, down 9.5 percent from a year ago. Existing-home sales in the Midwest dropped 12.2 percent in February to a level of 1.01 million and are 9.0 percent lower than a year ago. The median price in the Midwest was $122,000, which is 5.4 percent below February 2010. In the South, existing-home sales fell 10.2 percent to an annual pace of 1.84 million in February but are unchanged from February 2010. The median price in the South was $134,600, down 3.9 percent from a year ago. Existing-home sales in the West declined 8.0 percent to an annual level of 1.26 million in February and are 2.4 percent below a year ago. The median price in the West was $190,000, which is 5.2 percent below January 2010.

What is happening with Denver area home sales at this time?

Is spring here in Denver? It certainly seems like it from these warmer temperatures. We know though that can all change here from week to week and sometimes day to day. This was an informative article from the Denver Post I wanted to share with good statistical information.

As consumer confidence increased in February, so did the number of homes sold in metro Denver, according to data released Wednesday.

The number of homes sold rose 3.4 percent in February to 2,229, compared with 2,156 the previous month, according to an analysis of Metrolist data.
Meanwhile, the Conference Board's Consumer Confidence Index, which had increased in January, improved further in February. The index stands at 70.4, up from 64.8 in January.
The number of homes sold in February was still down 8.5 percent compared with February 2010, when 2,436 sales closed.

The year-over-year decline is largely a result of the first- time-homebuyer tax credit expiring last year. The credit on home purchases drove about 40 percent of sales activity a year ago, said Gary Bauer, an independent real-estate consultant.
"Take that out of there, and look at what we have today, and it's really positive," Bauer said. "I'm very happy with what the numbers show. We've got activity."

The median price for a single-family home declined 2.2 percent, from $225,000 in January to $220,000 last month. In February 2010, the median price was $220,750.
The median price for a condo dipped 0.17 percent to $124,780, compared with $124,995 in January. In February 2010, the median price was $132,500.
"When you look at it as far as pricing goes, 71 percent of the condos closed this month were less than $200,000," Bauer said. "That's very positive."

With 18,685 homes on the market last month, the inventory has remained stable, declining 0.6 percent from January and 3.4 percent from February last year.
"There's always the fear that inventory will rise much faster than the market can handle," Bauer said. "We're about a month away from the start of our prime season, so people are putting their homes on the market at the right time.