Home Sales Rise Sharply in February

[JoshMclean]

By MARTIN CRUTSINGER AP Economics Writer


WASHINGTON Mar 23, 2007 (AP)— Sales of existing homes unexpectedly rose in February by the largest amount in nearly three years, but analysts expressed fears that the recovery for the battered housing industry will be slowed by spreading troubles in mortgage lending.
The National Association of Realtors reported Friday that sales of existing homes rose by 3.9 percent last month, pushed higher by a sharp increase in sales activity in the Northeast. It was the biggest increase since a similar increase in March 2004.
The increase pushed sales up to a seasonally adjusted annual rate of 6.69 million units, still 3.6 percent lower than a year ago. Sales fell by 8.5 percent for all of last year as housing hit a sharp slowdown after setting sales records for five straight years.
Analysts, who had been looking for sales to decline in February, said the increase reflected warmer weather in the Northeast and Midwest and said that the housing industry is still not on a sustained rebound.
"Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications," said Ian Shepherdson, chief economist at High Frequency Economics.
The price of a median home sold last month dropped to $212,800, down by 1.3 percent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago.
Analysts said the price declines were helping to lure buyers back into the market. But analysts expressed concerns about what the growing problems in the subprime lending market will do to the prospects for future sales.
Subprime mortgages were offered to people with weak credit histories who could not qualify for standard types of mortgages. Now an increasing number of those mortgages are going into default. That is forcing lenders to tighten up on their loan standards, meaning people who would have qualified for subprime mortgages will not be able to do so.
David Lereah, chief economist for the Realtors, said he believed that demand for homes could be cut by 150,000 to 200,000 annually over this year and 2008 because of the lending troubles.
"Our view is that the tightening in the subprime market will have a negative impact on home sales," Lereah said. "It probably won't postpone the recovery (in housing) but it will slow it."
By region of the country, sales were up 14.2 percent in the Northeast, a gain that was attributed in part to warmer-than-normal weather this winter, which spurred sales.
Sales of existing homes were up 3.9 percent in the Midwest and 1.6 percent in the South, while sales were unchanged in the West. Lereah said the reluctance of sellers in the West to trim prices was holding back a rebound in that region.

[Geo]

CNN/Money had a similar article but with a different spin. They said that the sales were up primarily because the home prices came down and used the Detroit Automakers as an analogy...

See below-

http://money.cnn.com/2007/03/23/news...ion=2007032314

[SHELLY]

Florida Statistic for FEB 07

SINGLE FAMILY HOMES: http://media.living.net/statistics/2...Ex%20Chart.pdf

CONDOS: http://media.living.net/statistics/2...do%20Chart.pdf

[nmosley]

Hey Shelly -
How are you? I looked at your stat links and noticed that Panama City seems to be doing better than most areas with an increase in sales and a slight drop in pricing. What do you think is going on there relative to the other areas on those reports? Just wanting to pick your brain because I know that you must have an observation/thought about it in there somewhere... Thanks for posting this info for us. Have an excellent weekend!

[SHELLY]

Hey Shelly -
How are you? I looked at your stat links and noticed that Panama City seems to be doing better than most areas with an increase in sales and a slight drop in pricing.

Could be Supply and Demand in action
(lower price = higher sales)

Could be release of pre-sale condos/homes contracted during the frenzy
(more "sales" on release @ the lower pre-sale price)

Could be Chrysler's new sales promotion: Buy a Town & Country Van, get a free condo.

Could be the result of anticipation leading up to GUEST SPEAKER EXTRAORDINAIRE Dr. Steven Cochrane's Beer & Brats Panama City Beach Fractional Sale-a-rama.

[trying2makeabuc]

Is Sowal Panama City or Ft. Walton?

[Camp Creek Kid]

Is Sowal Panama City or Ft. Walton?

Sowal is neither Panama City nor Fort Walton. We are in Walton County, which is between Panama City Beach (Bay County) and Destin (Okaloosa County). Walton County stretches from the Alabama border to the Gulf of Mexico. The southern portion of Walton County is know as "South Walton" is separated from the rest of Walton County by the Choctawahatchee Bay. South Walton = Sowal

[beachmouse]

Walton County is in between the Ft. Walton Beach-Destin-Crestview and Panama City metro areas, but is actually considered to be a rural county that is part of neither metro area.

At least for now. I wouldn't be surprised to see the Census Department (who sets the metro area boundaries that the real estate biz uses for their numbers) attach it to one or the other metro areas since the area is urbanizing at a pretty quick pace.