Mar
21

Existing-Home Sales Come Down

March 21, 2011

As the nation’s housing market tries to recover, we have to expect some ebbs and flows along the way.

This is one of those ebbs: After three straight months of increases, existing-home sales fell across the country last month.

According to the National Association of REALTORS, the sale of existing U.S. homes dropped 9.6 percent in February to a seasonally adjusted annual rate of 4.88 million, down from 5.40 million in January.

Lots of for sale signs outside houses.“Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” said Lawrence Yun, NAR chief economist.

“This tug and pull is causing a gradual but uneven recovery.”

The national median existing-home price was $156,100 in February, which is 5.2 percent below the price in February 2010.

This is due in large part to distressed homes, which were sold at a discount and accounted for a 39 percent market share last month, an increase from 37 percent.

In addition, February saw all-cash sales hit 33 percent, the largest activity on record.

“The decline in price corresponds to the record level of all-cash purchases where buyers — largely investors — are snapping up homes at bargain prices,” said Yun. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.”

There are resources to discuss credit issues. For that story, click here.

Also, the news on the local front was a little more positive today, with Chicago real estate numbers showing some promise. Click here to see that story.

Back to the national outlook: Ebbs and flows. This month the country ebbed, next month, let’s hope for flow.

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Tracey

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