Sales Of Existing Homes Chilled Out In January
March 1, 2010,
Sales of existing homes fell 7.2% to a seasonally adjusted rate of 5.05 million units in January — down from a revised 5.44 million in December — but were 11.5% above year-ago levels, the National Association of Realtors reported today.
NAR chief economist Lawrence Yun pointed out, “Most of the completed deals in January were based on contracts in November and December. People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales.”
“Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery,” he said.
Total housing inventory fell 0.5% at month's end, standing at 9.6% below a year ago — the lowest level since March 2006.
“Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory,” Yun said. “With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country.”
The national median existing-home price for all housing types was $164,700 in January, NAR reported, unchanged from a year earlier.
Distressed homes, which accounted for 38% of January sales, continue to downwardly distort the median price, NAR said.
NAR president Vicki Cox Golder said buying a home in the current environment has become more challenging. “First-time buyers and others who need a mortgage are increasingly losing out to all-cash investors for the best bargains in many areas, particularly for foreclosed homes where cash is king,” she said.
Regionally, existing-home sales in the Northeast fell 10.9% in January, still 22.4% above the year-ago level. Sales in the Midwest declined 6.9% but were 8.0% year over year.
Sales in the South fell 7.4% but were up 12.0% year-to-year. In the West, sales fell 5.2% but were 7.6% over last year.