Here’s Why Existing Home Sales Dipped Badly in February

According to the National Association of Realtors, Existing Home Sales came in at 4.88 million annualized sales– much lower than Wall Street’s expectations for 5.15 million sales. Here’s your Cheat Sheet:

Sales: Sales of existing homes came in at a seasonally adjusted annual rate of 4.88 million in February.

Month-over-Month Change: This is 9.6% below the upwardly revised 5.40 million in January 2011.

Year-over-Year Change: This is 2.8% below 2.8 percent below the 5.02 million pace in February 2010.

Prices: The national median existing-home price of $156,100 in February was 5.2 percent below February 2010.

Inventory: Up 3.5 percent to 3.49 million existing homes available for sale. This represents a supply of 8.6 months at the current sales rate, up from 7.5 months in January.

Noteworthy Stats: 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. 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.

Commentary: 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 said. “This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July.”

More Details: 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 price5 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.

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