Home Sales Down Slightly in February
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- Peter King | March 23, 2010
Existing home sales stabilized in February, following two months of steep declines.
Sales of existing homes decreased 0.6 percent last month, according to the National Association of Realtors, to a seasonally adjusted annual rate of 5.02 million units. The small decline comes on the heels of a 7.2 percent drop in January and a record 16.2 percent decline in December, which ended eight consecutive months of increasing sales.
February sales represent an annual increase of 7.0 percent from the 4.69 million sales rate of February 2009.
The relatively flat sales in February occurred despite the approaching end of the expanded federal tax credit program on April 30. Analysts had projected that sales would pick back up once buyers got back in the market after the credit was extended and expanded in November; the dropoff of sales in December was widely attributed to buyers concluding sales before the credit’s original Nov. 30 expiration date.
Lawrence Yun, NAR chief economists, said winter storms may have suppressed sales in February and discouraged home shoppers from going out to visit properties. However, sales increased in the Midwest and Northeast, the regions most affected by storms, by 2.4 – 2.8 percent, while declining in the West and South by 4.7 percent and 1.1 percent respectively.
Terming the housing recovery as “fragile,” Yun said the coming weeks will be important for the market.
“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 home buying 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 median sales price was $165,100, representing a 1.8 percent decline from one year ago. The NAR does not provide seasonally adjusted prices. Distressed homes, including foreclosures and short sales, made up 35 percent of all home sales.
The NAR’s survey includes single-family homes, condominiums, townhouses and co-ops.
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