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REALTOR®: Existing-Home Sales Rise in February

Wednesday, March 25, 2009

The National Association of REALTORS® reported this week existing-home sales increased in February, reversing losses in January. The NAR report also disclosed recovery in the West, lead by the state of California, was stronger than expected.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January, but are 4.6 percent below the February 2008 level.

First-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges. "Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February," NAR chief economist Lawyence Yun said. "Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price."

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago, when the median was $195,800 and conditions were close to normal. "Given the downward distortion in price comparisons due to distressed sales, it's important for owners to keep in mind that this doesn't equate to a similar loss of value for traditional homes in good condition," Yun explained.

Recovery in the West is much stronger than expected, according to Yun. "Strong sales gains in the West are led by California, where the median listing price is beginning to rise for the first time in three years," he said.

NAR President Charles McMillan said home shopping activity has picked up with housing affordability at a record high. "The number of buyers looking for homes rose 5 percent in February, and also was 5 percent above a year ago," he said. "It appears most of the increase in buyer traffic occurred in the latter part of the month, after the $8,000 first-time buyer tax credit was put in place. At the same time, mortgage purchase applications have risen, so we expect to see sales picking up around late spring."

McMillan noted more potential buyers are learning about the tax credit, just as the traditional spring home-buying season begins. "In this changing market, smart buyers and sellers consult with REALTORS® who can advise them about current conditions in their area, and counsel them on the best way to move forward," he said.

Julia Truesdale Keady, president of the Silicon Valley Association of REALTORS®, said timing is very good for buyers because of the tax credits, the very low rates and inventory at a record high. "Buyers should consult a REALTOR® who is knowledgeable about conditions in their area, and who can help them arrive at a decision that is right for them."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.13 percent in February from a record low 5.05 percent in January; the rate was 5.92 percent in February 2008. Last month's average mortgage rate was the second lowest since data collection began in 1971. Last week the rate further declined to 4.98 percent.

Total housing inventory at the end of February rose 5.2 percent to 3.80 million existing homes available for sale, which represents a 9.7-month supply at the current sales pace, unchanged from January. Single-family home sales rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February from January, but are 3.6 percent below last year. The median existing single-family home price was $164,600 in February, down 15 percent from a year ago.

Existing condominium and co-op sales increased 11.4 percent to a seasonally adjusted annual rate of 490,000 units in February from January, but 13.1 percent lower than a year ago. The median existing condo price was $172,200 in February, which is 18.7 percent lower than February 2008.

Regionally, existing-home sales in the West increased 2.6 percent in February and are 30.4 percent higher than a year ago. The median price in the West was $204,600, which is 30.3 percent below February 2008. Existing-home sales in the Northeast jumped 15.6 percent in February, but are 14.9 percent below February 2008. The median price in the Northeast was $251,200, down 4.8 percent from a year ago. Existing-home sales in the Midwest increased 1 percent in February, but are 14 percent lower than a year ago. The median price in the Midwest was $131,000, which is 7.8 percent below February 2008. In the South, existing-home sales rose 6.1 percent in February, but are 11.2 percent below February 2008. The median price in the South was $146,700, down 10 percent from a year ago.

The NAR report still characterized sales activity as relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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