February is proving to be marking historic lows in the real estate sector. After reporting last week that in February, new home starts hit 1984 lows and permits have never been lower, today brings more bad news in the form of existing home sales which fell nearly 10% to prices at their lowest point in nearly nine years. Both numbers fell far below economists’ predictions.
Compared to February 2010, existing home sales were down nearly 3% from that low point and the median home price dropped 5.2% from that period to $156,100 where it has not been since April 2002. Although 34% of homes purchased were by first time home buyers, that number is down 8% from last year.
In February, single family and multifamily experienced the same 10% sales dip, making neither faring better than the other.
NAR forecasts more storms ahead
In a former era, the National Association of Realtors was famous for cheerleading despite reality, but for the past few years, NAR has been more realistic with presenting real estate economics.
“If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market,” said NAR chief economist Lawrence Yun.
“Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” Yun said.