Wednesday, February 25, 2009
FAR FROM OVER
January U.S. Existing Home Sales & Prices Fell
· Any prior indication that home sales were stabilizing should be dismissed. According to the National Association of Realtors, sales of existing homes fell 5.3% last month to 4.490M after an unrevised December rise of 4.4%. Consensus expectations had been for January sales of 4.79M homes. Total sales include sales of condos and co-ops.
· For existing single-family homes alone sales reversed all of their December rise with a 4.7% decline to 4,050 million units, the lowest level since July 1997. (These data have a longer history than the total series).
· The weakness in sales continued to lower pricing power. Median home prices plumbed a new cycle low with a 3.1% month-to-month (NSA) decline. It was the seventh consecutive monthly drop and it lowered prices by 14.8% from January of 2008. Prices have fallen 25.8% since their peak in June 2005.
· The number of unsold homes (condos & single-family) on the market dropped 2.7% (-13.5% y/y) as sellers pulled homes for sale. At the current sales rate there was a 9.6 months' supply on the market which was near the lowest since 2007. For single-family homes the inventory was unchanged after a sharp December decline and at the current sales rate there was a 9.2 month's supply, near the lowest since 2007.
· By region, home sales in the Northeast collapsed 14.7% m/m to lower them by nearly one quarter from the year ago level. Single family home sales here were at their lowest since 1991, off 46% from the 2007 peak. Sales in the South followed with a 5.7% decline which reversed the December gain. Single family sales were at their lowest since early 1998. Sales in the Midwest also reversed the December gain with a 5.7% decline to the lowest level since 1997. Only sales in the West held up. They were unchanged last month from December and they were up by 29% from the year ago level.