The housing market is not going to fully heal
until three different indicators hit bottom: sales, building
activity, and prices. Today’s report on existing home sales
signals that sales have likely bottomed already. The number
of existing homes sold increased 5.1% in February. In
addition, the number of homes for sale increased for the first
time since July. This is consistent with marginal sellers,
previously too scared to even dip their toes in the housing
market, now sensing an imminent turn in the market,
particularly in metropolitan environments where many of the
price declines have been the strongest. Most of the increase
in inventory in February is attributable to condos/coops.
Although the median home price is down 15.5% versus last
year, this is a smaller year-ago drop than last month (when it
was -17.5%). In terms of the other housing indicators, we
expect home building to bottom late this year and prices to
bottom a few months later. However, it is also important to recognize that much of the remaining pain in the housing market will be concentrated in five states: California, Florida, Arizona, Nevada.
until three different indicators hit bottom: sales, building
activity, and prices. Today’s report on existing home sales
signals that sales have likely bottomed already. The number
of existing homes sold increased 5.1% in February. In
addition, the number of homes for sale increased for the first
time since July. This is consistent with marginal sellers,
previously too scared to even dip their toes in the housing
market, now sensing an imminent turn in the market,
particularly in metropolitan environments where many of the
price declines have been the strongest. Most of the increase
in inventory in February is attributable to condos/coops.
Although the median home price is down 15.5% versus last
year, this is a smaller year-ago drop than last month (when it
was -17.5%). In terms of the other housing indicators, we
expect home building to bottom late this year and prices to
bottom a few months later. However, it is also important to recognize that much of the remaining pain in the housing market will be concentrated in five states: California, Florida, Arizona, Nevada.
