Existing Home Sales Fall 4.6%

[girl gone mad]

Barry Ritholtz, http://www.ritholtz.com/blog/2009/03/existing-home-sales-fall-46/">The Big Picture

Home prices dropped 15% from the same period one year ago; Despite the price drop, sales fell 4.6%. How anyone can try to spin this as a positive is beyond my mathematical comprehension.

Even the NAR reported that “overall sales activity remains relatively soft,” as existing-home sales increased in February (month over month).

This was another weak housing report. Do not be fooled by the monthly gains, as we have been saying for 4 years now, as they are meaningless (see chart at bottom):

-Single-family home sales rose 4.4% to a seasonally adjusted annual rate of 4.23 million in February. They fell 4.6% from the 4.95 million-unit level of February 2008;

-Distressed properties accounted for 45% of all sales;

-Home foreclosures were up 30% in February from a year earlier;

-The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago.

-The median existing single-family home price was $164,600 in February, down 15% from a year ago

-Total housing inventory at the end of February rose 5.2% to 3.80 million existing homes available for sale, a 9.7-month supply at the current sales pace.

-The absolute number of homes for sale rose to 3.8 million from 3.6 million

-The West continued to see the biggest drops in prices due to foreclosures.

While there was a healthy increase in sales from January, a look at the non-seasonal data might be instructive: As expected, the gins are primarily seasonal in nature, with January the worst sales month of the year, and February the start of modest seasonal improvements.

[FrenchieCat]

1. Was February expected to be a good month?

during the worst recession seen since the Depression.

Seemed like everyone expected these numbers.
In fact, I heard it wasn't as bad as expected.

[Po_d Mainiac]

5. This is a month to month comparison

In udder words....Shit plus 5% sales tax :yoiks:

[Skink]

2. The local new attributed today's rise in the dow to good home sales.

This is Texas though and home prices never really got crazy.

[spag68]

3. home sales

I know it's only anecdotal, but my daughter in St. Pete, who is in real estate says some homes are starting to move down there. California after drastic price reductions is also starting to move. If the rethuglican and dino members get pressured into supporting Obama's plans, we may actually see some upturn by the third quarter. In any case, it's better to look on the bright side then to drown in sorrow over something in which you have no control.

[Zynx]

4. That is a SAAR number.

It was a rate of gain if it held for the entire year that would produce a 5.1% gain for the year. It's actually not that big. However, y/y numbers are not the only way of looking at economic numbers. While I agree this report means nothing, month to month changes do matter. If we saw six back to back monthly gains, but were still down year over year, I would be optimistic.

[girl gone mad]

6. But y/y sales numbers are the most accurate method of determining...

market conditions. Home Sales are highly seasonal

Sales always increase starting in February and running through June. It's the same pattern year in and year out, so it's completely disingenuous to use the m/m number to promote the idea that home sales are up, when in reality, they are actually still declining. It would be just as disingenuous to use the traditional sales decline from September to August as evidence that the market was tanking, when in reality this is an annual event caused by families trying to get settled before the new school year.

Here's the chart, by the way.

[Zynx]

7. SAAR accounts for seasonal factors.

Year on year numbers aren't that great for a lot of reasons. The employment situation graph is a good example: http://anasdaq.econoday.com/showimage.asp?imageid=17278

As late as April of '08 it looked like the labor market was still growing on a year on year basis. However, using month to month seasonal numbers, it was clearly in decline.