Surprisingly strong existing home sales, but keep an eye on that inventory!
The latest existing home sales data -- for February -- was just released. Here are the details:
* The seasonally adjusted annual rate of sales rose 3.9% to 6.69 million units. That was well above the 6.3 million unit forecast and the fastest rate of sales since April 2006. However, it was still down 3.6% from a year earlier.
* The supply of homes on the market climbed 5.9% from a month earlier to 3.748 million units. That's also up 25.6% from the year-ago figure of 2.985 million and equal to 6.7 months of inventory at the current sales pace.
* Median home prices dropped 1.3% year-over-year to $212,800. Single-family homes accounted for the decline; condo/co-op prices actually rose slightly YOY.
Color me surprised -- these sales numbers were definitely stronger than expected, especially since the pending home sales index dropped 4.1% in January. Weather may have influenced the results to some degree, as the Northeast region showed an outsized 14.2% month-over-month gain. But sales in all regions were either flat or up.
The real problem remains inventory. Just as I expected, we're seeing the "March of the Re-Listers" show up. These are the people who pulled their homes from the market for the holidays, and who are now re-listing them to capitalize on the seasonal uptick in sales we see every spring. Indeed, the 5.9% monthly rise in supply outstripped the 3.9% gain in sales. The current inventory count (shown in the chart above) is also not far below the multi-year high of 3.861 million units set in July 2006. It's likely we'll get very close to that benchmark -- or surpass it -- in the months ahead.
Naturally, that means pricing should remain weak. Median home prices have now fallen below their year-ago level for seven straight months. Tighter lending standards will reduce buying power as well, providing another headwind for home sellers during the key spring real estate season.
* The seasonally adjusted annual rate of sales rose 3.9% to 6.69 million units. That was well above the 6.3 million unit forecast and the fastest rate of sales since April 2006. However, it was still down 3.6% from a year earlier.
* The supply of homes on the market climbed 5.9% from a month earlier to 3.748 million units. That's also up 25.6% from the year-ago figure of 2.985 million and equal to 6.7 months of inventory at the current sales pace.
* Median home prices dropped 1.3% year-over-year to $212,800. Single-family homes accounted for the decline; condo/co-op prices actually rose slightly YOY.
Color me surprised -- these sales numbers were definitely stronger than expected, especially since the pending home sales index dropped 4.1% in January. Weather may have influenced the results to some degree, as the Northeast region showed an outsized 14.2% month-over-month gain. But sales in all regions were either flat or up.
The real problem remains inventory. Just as I expected, we're seeing the "March of the Re-Listers" show up. These are the people who pulled their homes from the market for the holidays, and who are now re-listing them to capitalize on the seasonal uptick in sales we see every spring. Indeed, the 5.9% monthly rise in supply outstripped the 3.9% gain in sales. The current inventory count (shown in the chart above) is also not far below the multi-year high of 3.861 million units set in July 2006. It's likely we'll get very close to that benchmark -- or surpass it -- in the months ahead.
Naturally, that means pricing should remain weak. Median home prices have now fallen below their year-ago level for seven straight months. Tighter lending standards will reduce buying power as well, providing another headwind for home sellers during the key spring real estate season.
posted by Mike Larson at
10:08 AM
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