Skip to comments.Existing-Home Sales Rebound, but Prices Plunge
Posted on 03/23/2009 7:24:03 AM PDT by Fred
WASHINGTON -- Existing-home sales rebounded in February, climbing above expectations, but prices plunged again.
Home resales climbed to a 4.72 million annual rate, a 5.1% increase from January's unrevised 4.49 million annual pace, the National Association of Realtors said Monday.
Foreclosures and short sales reflect about 45% of total existing-home sales. Distressed properties are discounted, so the abundance of these sales prices new homes out of the market, discouraging construction and weakening the overall housing sector further.
With so many distressed sales, the median price for an existing home fell last month. At $165,400 in February, the median price was down 15.5% from $195,800 in February 2008. The median price in January this year was $164,800. The 15.5% plunge is the second biggest ever, behind January's 17.5% drop.
The sharp tumble in prices, falling because of bloated inventory, is restraining demand. Monday's data showed inventories of previously owned homes rose 5.2% at the end of February to 3.8 million available for sale, which represented a 9.7-month supply at the current sales pace. There was a 9.7-month supply at the end of January.
The February resales level of 4.72 million reported Monday by NAR was above Wall Street expectations of a 4.48 million sales rate for previously owned homes. The 5.1% increase was the largest since 5.6% in July 2003.
"but?" maybe "because"?
Right up there with “crime keeps going down, but we keep building more prisons”
Great news - this has to mean property taxes, based on an assessed value, will be decreasing. I can’t wait.
They’ll just raise the mil rate. Problem solved.
Yep. But it’s far worse than one might glean from this article. This weekend I was looking at houses in a certain town south of Silicon Valley. In five blocks, maybe 100 houses, there were four houses listed for sale (nothing surprising there) but there were eight houses that were completely abandoned that don’t show up on any “retail” real estate listing site.
Note that these houses were built in 2006 and all were in excellent shape. And one of them had never been occupied.
Who would have thunk.
They got it backwards. House sales went up because prices dropped.
The housing bubble is deflating, with those who took on high-risk mortages they could not afford getting foreclosed upon.
Meanwhile, young creditworthy couples who had a hard time coming up with a 20 percent down payment because of the bubble, all of a sudden can now afford a home.
In the long run, a better situation - a much higher percentage of mortages being low-risk and conventional. But NOOO... we need to re-inflate the bubble!
>> At $165,400 in February, the median price was down 15.5% from $195,800 in February 2008. The median price in January this year was $164,800. The 15.5% plunge is the second biggest ever, behind January’s 17.5% drop. <<
In other words, prices ROSE in February, from January, but were still well below last year’s prices. That’s the big news. Talking about a year-over-year decline as a monthly price plunge is ridiculous: did anyone seriously think that the entire collapse of 2008 would be made up for in a single month?
One month of stability does not make the end of a bubble collapse, of course...
If you’re holding your breath, you are going to turn blue and die.
They just hike the rate.
Existing-home sales rebounded in February, climbing above expectations, but prices plunged when stocks are worthless invest in homes.
My son is waiting like a vulture, in his town they let all the Williams Co. employees go and this month they let most of the Haliburton workers go, he’s just biding his time waiting for something cheap.
All Hail Pres. Obama....
oh wait...his plan hasn't kicked in yet.
Never mind !
Not always. That is true in CA, but in states without Prop 13 style protections, taxing agencies will just raise the rate.
If foreclosures represent some 45% of those sales, it looks like real property sales might actually be down.
the actual value and county assessed value, of my home more than doubled since purchasing it in 1998. In this economy it has decreased in actual value (but not by county assessed value) by maybe 10-15%.
I’m still ahead.
I supposed I should clarify my post...
Home sales can be compared to retail sales.
Foreclosure sales are more like garbage-picking.
When you can get something for almost nothing, you are more inclined to buy it. In Detroit, you can buy homes for $1.00 and up.
People snatching up foreclosed homes at fire-sale prices cannot be compared to new home sales.
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