Home Sales Jump In February

Home Sales Jump In February


Some are positioning this as a bit of good economic news, and it is…but a bit of perspective is needed.

Not everybody is suffering right now, and if folks can buy homes at a 20 to 30% discount with historically low interest rates, why wouldn’t they? There are a lot of bargains out there right now, and just because people are going bargain shopping doesn’t mean the economy is picking back up. However, it may mean that the economy is at least bottoming out.

NY Times…

The National Association of Realtors said Monday that sales of existing homes increased 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003. […]

February’s median sales price was up slightly from January, which recorded the lowest median price since September 2002. Prices are down about 28 percent from their peak in July 2006.

In contrast with the housing boom, when buyers took out ever-riskier loans and maxed out their home equity lines, “homebuyers are not over stretching” said Lawrence Yun, the Realtors’ chief economist. “They want to stay within their budget.”

By summertime, sales are expected to get a lift from a $8,000 tax credit for new home buyers included in the economic stimulus package signed by President Obama last month.

Anybody else out there thinking about buying a house right now? What kinds of deals are you seeing?

Do tell.

  • kranky kritter

    Ultimately, the question is what a stable sustainable rate of home sales is for our nation, based on incomes. In 1990, 3 million existing homes were sold a year. By 1995 it was up to 3.5. By 2000 it was up to 4.6. By 2005, up to 6.2, then down to 5.7 in 2006 and 4.9 in 2007.

    I agree that this is better regarded as signaling a bottom than a bounce back. Where we were was an inflated place, and we all ought to accept that to a large extent. We need a new equilibrium, and can go from there. Where we were a year or two ago just isn’t relevant. We’d be fools to think or hope that the RE market can bounce back to where it was when lots ofpeople were being given mortgages to buy homes they couldn’t afford.

    The best news in this story is that people are making choices to buy within their means. In large part, this is probably because very few lenders are giving out mortgages for homes that the borrowers have insufficient income to afford. That is also a good thing.

  • Trescml

    I think there are good deals in exurbs, OK deals in collar counties, and close into town prices not dropped nearly as much. It will be interesting to see if this becomes a permanent price split or not.

    The news though is at least somewhat good in the fact that it takes some excess inventory off the market and that is needed long term recovery.

  • http://sidewaysmencken.blogspot michael reynolds

    I’m putting all my money into CEF’s — Conservative Excuse Futures. There’s going to be a huge market as conservatives generate tortured and arcane explanations for how their predictions of doom and failure were actually right all along.

    At the same time I’m shorting CCRF’s — Conservative Connections to Reality Futures.

  • http://www.princetown-cda.com bill

    The size of the home you purchase can have a substantial impact on utility costs. It is safe to assume that the bigger the house, the bigger your utility payments. Remember, more than just the sales price determines the expense of a house. Utility payments can be a big “gotcha” for first time homebuyers. So heed this warning and buy an efficient home without an excessive amount of space.