–National Median Price $165,100 in Feb, -1.8% Yr Ago, But Jan Up
–NAR Chief Econ Yun: Still Hoping for April-May June Sales Surge

By Denny Gulino and Ian McKendry

WASHINGTON (MNI) – U.S. sales of existing single-family homes, town
homes, condominiums and cooperatives edged down 0.6% in February, the
third monthly decline, while the inventory of unsold houses surged by
the most for the January-February period in 20 years, the National
Association of Realtors reported Tuesday morning.

The NAR’s Chief Economist Lawrence Yun said the sharp increase in
inventory, to an 8.6 month supply, was “discomforting” but he is still
hoping for a second sales surge in the April-May-June period by buyers
hoping to beat the expiration of tax credits.

The total of unsold houses jumped by 312,000 units in January, to a
total of 3.59 million. That was the biggest increase in inventory for
the January-February period in two decades. Though not reflected in the
data, Yun theorized that inventories are being boosted by “trade-up”
buyers listing their houses a little earlier in the process than usual,
to catch this year’s tax credit.

Sales were up 2.4% in the Northeast despite heavy snow in some
areas south of New England, and rose 2.8% in the Midwest. But sales
dropped 4.7% in the West, with California not having enough houses in
the under-$500,000 range to meet demand, Yun said. Sales were down 1.1%
in the South.

The national median price was $165,100 in February, down 1.8% from
a year ago. But January’s price was revised to show a tiny increase,
0.2%, making it the first price advance nationally since August 2007.

Prices rose in the Northeast by 7.5% but were down in the other
three major regions. Prices dropped 9.8% in the West, 4.2% in the South
and 2.0% in the Midwest compared to a year earlier.

Yun said that second sales surge is needed to confirm “clear price
stabilization,” often described as the single most important metric to
mark a housing recovery.

Sales of single family houses dropped 1.4% in February but were
4.0% above a year earlier. Condo sales rose 4.8% and were 30% ahead of a
very distressed year-ago level.

All-cash sales remain at an extraordinary proportion of the total,
27%, with 10% a more normal proportion. Yun said among the reasons could
be that investors, who can pay cash, are more numerous, that first-time
buyers need family help to make the down payment and that buyers were
facing a more difficult credit and appraisal environment.

Distressed sales were 35% of February’s total, slightly less than
January’s 38%. First-time buyers accounted for 27% of the month’s sales,
up from January’s 42%.

The extended $8,000 tax credit for first-time buyers and the
accompanying $6,500 move-up credit require a sales contract be signed by
April 30 and the sale be closed by June 30.

Yun said traffic from prospective buyers was up slightly in
February, giving a “hint” of more sales to be closed later. But a
definitive reading of any surge that resembled that when the first tax
credit was originally due to end late last year will await the April
existing home sales report NAR will deliver in May. Up to then, Yun
conceded, will be “a lot of suspense.”

The existing-home sales report for December is scheduled to be
released Thursday, April 22, at 10 a.m. ET.

** Market News International Washington Bureau: 202-371-2121 **

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