February Existing Home Sales - Nothing Like the Headline
Normally when I complain about mainstream media headlines concerning housing, the headline normally depicts worse news than the actual numbers being reported. February’s existing home sales were just the opposite. The headline said, Home price slump helps spur sales.
The numbers on the other hand, showed median prices went down and year over year sales, the only figure that matters, were also down. The good news, and this was the part the media focused on, was February’s sales outpaced January. While this is good news, it’s relatively meaningless. Each month could outpace the previous one for the entire year and we could still end up with 2007 having less sales than 2006.
The National Association of Realtors said Friday that home sales rose 3.9 percent last month to an annual rate of 6.7 million from a revised 6.4 million pace in January. It was the biggest percentage increase since March 2004.
Economists surveyed by Briefing.com had looked for a slowdown to a 6.3 million pace. But even though sales rose from January, the pace was still down 3.6 percent from February 2006.
But the report also showed the median price of a home sold in February fell 1.3 percent to $212,800 from a year earlier.
One month of data is normally not enough to see a trend and it is encouraging that February’s report exceeded analyst’s expectations, but a year over year sales decrease doesn’t really bode very well. The important thing to remember is housing varies from city to city, even neighborhood to neighborhood.
It’s looking more and more like the housing market is shifting into the favor of buyers. If the bubble blogs are right, there are plenty of people waiting on the sidelines for the right time to jump back into the housing market. Even in the worst housing market in the country, Detroit, deals like a $1300 house, can be had.