March 22, 2012 (Chris Moore)
Completed transactions of existing home purchases fell in February but remained above last year’s levels while home prices produced a modest rebound following the previous month’s six percent drop according to the National Association of Realtors® (NAR).
Monthly existing home sales, which include single-family homes, townhomes, condos, and co-ops, fell to a seasonally adjusted rate of 4.59 million in February, down from a revised 4.63 million in January, a decline of 0.9 percent. Sales were still 8.8 percent higher than the seasonally adjusted 4.22 million completed transactions in February 2011.
For the fifth consecutive month, nearly one out of three Realtors® reported losing a sale due to a contract failure, suggesting that home sales could have been higher if the number of contract failures were at more historic levels. In February of last year, nine percent of the Realtors® reported a contract failure.
Most contract failures are caused by declined mortgage applications or low appraisals but can also be caused by home inspection problems and employment losses.
Lawrence Yun, chief economist of NAR, stated, “The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market.”
Regional Home Sales:
Monthly existing home sales in the Northeast declined 3.3 percent to an annual rate of 580,000 sales but were 5.5 percent higher than in February of last year, while in the Midwest, sales were 1.0 percent higher than the previous month, increasing to a rate of 1.02 million annual sales, and were 13.3 percent lower than last year’s sales pace.
In the South, monthly existing home sales rose 0.6 percent in February at an annual pace of 1.77 million transactions and were 9.3 percent above February 2011’s levels, and in the West, sales for the month fell 3.2 percent to an annual rate of 1.22 million transactions but were 6.1 percent higher than last year’s sales pace.
Home prices increased 1.2 percent as the national median existing home price increased from $154,700 in January to $156,600 in February. The median home price in February was 0.3 percent higher than a year ago, the first time that has happened in 15 months.
The median price in the Northeast was $225,800, which was 1.9 percent lower than a year ago, while the median price in the Midwest was $120,500, down 0.5 percent from February 2011.
In the South, the median price was $138,100, a gain of 1.8 percent from a year ago and in the West the median price was $195,300, up 3.1 percent from February of 2011.
Cash and Distressed Property Sales:
Distressed property sales accounted for 34 percent of all existing home sales in February, down from 35 percent in January and down from 39 percent in February of 2011. Foreclosure sales made up 20 percent of all existing home sales while short sales accounted for 14 percent of all existing sales.
Cash sales accounted for 33 percent of all sales in February, up from 31 percent in January, while investors jumped in and purchased 23 percent of the homes sold in February, the same amount as in January.
The number of homes available for sale in February increased 4.3 percent to 2.43 million homes which represents a 6.4 month supply, up from a 6.0 months supply in January.
Tags: existing home sales, investors, distressed property sales, declining prices, low appraisals, cancelled contracts, median home price, contract failures, purchase cancellations