(March 24, 2008) – The NAR released the February Existing Home Sales report this morning, showing that sales of existing homes increased 2.9% to a seasonally adjusted annual rate of 5.03 million units in February, but remain 23.8% below the 6.60 million-units one year ago.
Home prices fell again in February. The median existing-home price was $195,000 in February, down 2.0% from January and 8.2% from the February 2007 figure of $213,500. Over the year, prices fell most in the West (13.4%), by 8.6% in the South and 7.1% in the Midwest. Prices rose by 0.4% in the Northeast. In the coming months, however, I believe the eye of the hurricane will shift to the Northeast where investment banks, commercial banks and other financial firms will be busy reducing headcount. Less heads, smaller bonuses, fewer starter mansions, lower home prices–do the math.
Single-family home sales increased 2.8% to a seasonally adjusted annual rate of 4.47 million in February from 4.35 million in January, but are 22.9% below the 5.80 million-unit level a year ago. The median existing single-family home price was $193,900 in February, down 8.7% from February 2007.
The most interesting part of the report is that the inventory of unsold homes fell 3.0% to 4.03 million from 4.16 million in January. (Inventory peaked at 4.56 million last July.) It’s too soon to get excited (inventory was 3.45 million in 2006 and 2.85 million in 2005) but things are heading in the right direction.
At this point I can firmly predict that the world will not end–again.