Existing Home Sales prices fall; sales rise

The NAR released the existing homes sales data for February 2008 today.

Seasonally adjusted sales increased by 2.86% to an annual sales pace of 5.030 million a year from 4.89 million a year in January 2008. Year over year, sales decreased by 23.79% from an annual sales pace of 6.6 million in February 2007. The chart on the right compares existing home sales to new home sales.

Median Sales Prices are continuing to fall. The median sales price of $195,900 in February 2008 was 1.9% lower than last month’s median sales price of $199,700. Year over year prices in were lower by 8.24% than February 2007’s median sales price of $213,500 (compared to a year over year decline of 5.31% last month from January 2007’s median sales price of $217,400). If prices were to stay the same next for the month of March, the year over year decline would reach 9.89% from March 2007’s median of $217,400.

As discussed in this previous post, earlier this month the NAR predicted that the median sales price for 2008 would “decline 1.2 percent to a median of $216,300 this year, and then increase 3.5 percent to $223,800 in 2009.” The NAR did not reference that projection in today’s press release. In order to reach the median forecast, future months would have to exceed the median projection of $216,300 to make up for these two month’s shortfall.

Inventory fell from 10.2 months supply to 9.6 months supply thanks to a fall in inventory. Inventory typically grows in the spring and summer. Over 6 months supply puts pressure on home prices. These next few months are very important for the housing market.

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