February 2011 Existing Home Sales Down 9.6% Sequentially From Prior Month
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Median Price Off 5.2 Percent Year-Over-Year — see link to press release at the end of the post
The housing market continues to struggle as February sales of existing homes dropped 9.6 percent sequentially from January and were off 2.8 percent when compared to February 2010. The first graph shows the Seasonally-Adjusted Annualized Rate (SAAR) of home sales while the second removes the month-to-month noise by averaging the number of sales for the prior 12 months.
I remain comfortable with my current forecast of 4.9 million existing home sales for 2011 (and I typically am conservative on this).
Home prices have remained relatively stable in the past 18 months. The first graph shows the seasonality of prices and is difficult to define a trend. The second graph is the 12-month average of the medians (effectively removing the seasonality component) and shows just a very slight downward trend. Prices peaked in July 2006 (based on the 12 month average of median prices) at $224,350 and have fallen 23.7 percent to $171,150. Since February 2010, the 12-month moving average median price is down just 0.8 percent.
This analysis does indicate a stabilization in prices—and that is good news. I do not anticipate much change in prices in 2011.