In another blow to the housing industry, existing-home sales experienced an unexpectedly steep decline in February, dropping 9.6% to a seasonally adjusted annual rate of 4.88 million, according to data released today from the National Association of Realtors (NAR). Economists surveyed by Briefing.com had predicted a fall of 5.05% for the month.
To add insult to injury, the NAR’s data is still awaiting possible downward revision after news broke last month that industry experts had called the association’s data collection methods into question. CoreLogic has suggested that numbers may be inflated by as much as 20%. Revisions may be released this summer.
Lawrence Yun, NAR’s chief economist, placed blame for February’s poor showing on banks for enforcing overly strict lending standards. And the fact that all-cash transactions were up 1% to hit a record 33% of sales for the month supports his point.
Yun also cited “cancellations from appraisals not supporting prices negotiated between buyers and sellers” as a second factor fueling the month’s decline.
Discrepancies in pricing have been intensified by the onslaught of foreclosures, which continued to gain market share and erode pricing in February. Distressed homes captured a full 39% of sales in February, up 2% from January and an increase of 4% from February 2010. The national median existing-home price was $156,100 for the month, 1.1% lower than January and a 5.2% decline from the previous year.
“The decline in price corresponds to the record level of all-cash purchases where buyers—largely investors—are snapping up homes at bargain prices,” Yun said in a press release announcing the numbers this morning. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.”
Product types fell across the board. At a seasonally adjusted annual rate of 4.25 million, February’s single-family home sales were 9.6% lower than the previous month and 2.7% lower year-over-year. The median price of an existing single-family home was $157,000, 4.2% lower than the year-ago level.
Existing condo and co-op sales were down 10.0% to a rate of 630,000, a 3.1% decline year-over-year. The median existing condo price was $150,400 for the month, an 11.1% decline on an annual basis.
On a regional basis, existing-home sales declined across the country. The Northeast dipped 7.2% in February to an annual pace of 770,000. The Midwest fell 12.2% from the month before to 1.01 million, 9.0% lower than February 2010. The South dropped 10.2% from January to reach an annual pace of 1.84 million, the same number reported the previous year. And the West fell 8.0% to reach an annual level of 1.26 million, a decline of 2.4% year-over-year.
Median existing-home sales prices in February were $230,200 in the Northeast (down 9.5% on an annual basis), $122,000 in the Midwest (down 5.4% on an annual basis), $134,600 in the South (down 3.9% on an annual basis), and $190,000 in the West (down 5.2% on an annual basis).
Claire Easley is senior editor, online, at Builder.
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