Real Estate Blog

Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.

Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.

Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.

Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”

NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.

In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.

The new home sales numbers were beter than the street estimates and may signal a bottom in the housing market.

© 2009 FLORIDA ASSOCIATION OF REALTORS®

Survey: Americans Still Eager to Buy
Nearly 25 percent of adults say they plan to purchase a home in the next five years and half of those (53.5 percent) will be first-time home buyers, according to a survey commissioned by Move Inc., operator of Realtor.com.

More than 18 percent cite the $8,000 tax credit as a motivating factor. Potential home buyers with higher incomes are more interested in the tax credit than those in lower income brackets, with 43.4 percent of potential first-time buyers who earn $50,000 or more saying they plan to use the tax credit.

According to the survey, half of all Americans (49.6 percent) are paying more attention to home values today than they were a year ago, especially those ages 25 to 34 (61.9 percent). The median age of first-time home buyers is 30 years old.

The Move survey uncovered changing attitudes toward owning a home. About two-thirds (62.5 percent) now consider their home primarily a place to live as opposed to an investment. Adults earning up to $20,000 and between $30,000 and $39,900 annually are significantly more likely to feel most strongly that a home is more of a place to live than an investment as compared to those earning $50,000 or more.

When presented with a list of amenities, home owners wanted it all–with more space leading the list (about 10 percent chose that option). Other amenities that were high on many shoppers’ lists included energy saving features (6.8 percent), bigger or nicer yard (6.1 percent), a better location (4.2 percent), or updated amenities (3.4 percent).

The Move survey also found that 18 percent plan to take advantage of the Obama administrations program to prevent foreclosures.

Below are the numbers from NAR.

Existing-home sales increased in February, reversing losses in January, according to the latest report by the NATIONAL ASSOCIATION OF REALTORS®. However, sales activity remains relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect, according to NAR.

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. Existing-home sales are 4.6 percent below the 4.95 million-unit level in February 2008. Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity, according to NAR.

Lawrence Yun, NAR chief economist, says 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,” he says. “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.”

Home Buyer Tax Credit Increases Activity

NAR President Charles McMillan says 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 says. “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 notes that more potential buyers are learning about the tax credit, just as the traditional spring home-buying season begins.

Existing-Home Sales Rise in February

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. The median is where half of the homes sold for more and half sold for less.

“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 says.

Housing inventory: 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. In the six months prior to February, the total number of homes for sale had steadily declined from a record level last July.

Single-family home sales: rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February from a level of 4.05 million in January, but are 3.6 percent below the 4.39 million-unit pace in February 2008. 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 440,000 units in January, but are 13.1 percent lower than the 564,000-unit pace a year ago. The median existing condo price was $172,200 in February, which is 18.7 percent lower than February 2008.

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.

Regional Breakdown

Yun says a recovery in the West is much stronger than expected. “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 says.

Here's how existing-home sales fared across the country:

• Northeast: jumped 15.6 percent to an annual pace of 740,000 in February, but 14.9 percent below February 2008. Median price: $251,200, down 4.8 percent from a year ago.
• Midwest: increased 1 percent in February to a pace of 1.04 million but 14 percent lower than a year ago. Median price: $131,000, which is 7.8 percent below February 2008.
• South: rose 6.1 percent to an annual pace of 1.74 million in February but 11.2 percent below February 2008. Median price: $146,700, down 10 percent from a year ago.
• West: increased 2.6 percent to an annual rate of 1.2 million in February and remain 30.4 percent higher than a year ago. Median price: $204,600, which is 30.3 percent below February 2008.

Source: NAR