Tuesday, March 24, 2009

National Existing Home Sales Fall 4.6% & Prices Down 15.5% YOY in February (With an Aside About Local Numbers)

The National Association of Realtors (NAR), the largest trade association for real estate agents, has just released numbers for existing home sales in February 2009. The title of their Press Release is "Existing Home Sales Rise in February."

Which is true, there was a small rise from January 2009 to February 2009. But Barry Ritholtz of The Big Picture points out this year, as he has for the past four years, that sales always rise between January and February. And February and March. And March and April...rising to a plateau in July/August, since many folks tie their home purchases to the school year. (This rhythm may be even more obvious in this area, where the largest employer is actually a school).

An interesting piece of data that comes from the NAR press release is this:

In the South, existing-home sales...are 11.2 percent below February 2008. The median price in the South was $146,700, down 10.0 percent from a year ago.

Compare this to local numbers:

January & February Charlottesville: 26 fewer single family homes sold in '09 than '08, which is a year-over-year decline of -59%.

BUT in Charlottesville, 4 more houses sold in February 09 than January 09, which is a 36% increase.

January and February Albemarle: 34 fewer single family homes sold in '09 than '08, which is a year-over-year decline of -44%.

BUT in Albemarle, there was 1 more sale in February 09 than January 09, which is a 5% increase.

The numbers of sold houses and properties going under contract will continue to rise here, as elsewhere, from April-July (August). Not only do people need places to live, but interest rates are low and, for income qualified buyers, there's an $8K tax credit.

This doesn't mean
the market is suddenly "sanely" priced, nor that the market will suddenly find its bottom--no, and no. There's just too much inventory (let alone sellers who continue to buy the dream, evidence to the contrary, that this a "protected market" or "have" to make a certain amount).

It just means that there will be sales. And of course, some of those sales will be purchases where buyers overpay, IOHO.

Nationally, the oversupply is 9.7 months; in this area, it's about 3 years (or more, depending upon calculations). Nor does it mean that "affordability" has significantly changed. While many properties that have been on the market 120 days or longer are seeing price changes, these tend to be in the $15K range. Properties that went off the market and came back on this month, however, tend to have more significant drops, though whether these drops will get the house sold is another story....There are also more properties that start with "2" this year rather than "3" (that's a casual, not a scientific, observation). But there are also many 4 bedroom homes in the $600K - $1.5M range aimed at the "average" buyer...that will be harder to move, especially when buyer needs 20% down for a jumbo.

But back to the national numbers, via The Big Picture:
  • -Single-family home sales rose 4.4% to a seasonally adjusted annual rate of 4.23 million in February. They fell 4.6% from the 4.95 million-unit level of February 2008;
  • -Distressed properties accounted for 45% of all sales;
  • -Home foreclosures were up 30% in February from a year earlier;
  • -The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago.
  • -The median existing single-family home price was $164,600 in February, down 15% from a year ago
  • -Total housing inventory at the end of February rose 5.2% to 3.80 million existing homes available for sale, a 9.7-month supply at the current sales pace.
  • -The absolute number of homes for sale rose to 3.8 million from 3.6 million
  • -The West continued to see the biggest drops in prices due to foreclosures.

Related Reading:
Existing Home Sales Fall 4.6% - The Big Picture
Press Release - NAR
February Sales, March Inventory - Real C'ville
Median Prices in Cville, Alb, 20 Other Markets - Real C'ville
RealCentralVA: www.realcentralva.com/2009/03/04/home-sales-in-albemarle-and- charlottesville-down/ [apologies; can't get link to work otherwise]

1 comment:

Nalle said...

The news spin around these numbers has been bizarre, probably a sign that folks are tired of bad news (shocking) and ready to soak up anything good (see S&P response last week).

Calculated risk has an amazing graph from Greenspan and Kennedy's data which shows how much cash was taken out of houses (something that has been discussed on here). . I wonder how local we could get this data? Its stunning, and goes a long way to explain one of the connections between the housing price correction and the "real" economy. NO one takes out cash from a house to save it. . it all gets spent. And at the peak in 2007 the U.S. took out $1 trillion out of their houses. . . wow.