Existing home sales rise in February

Sales of existing homes increased in February and remain within a fairly stable range, according to the National Association of Realtors.

Existing-home sales -- including single-family, townhomes, condominiums and co-ops -- rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.

Lawrence Yun, NAR chief economist, said the gain is encouraging. "We're not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing," he said. "Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year."

The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slow down in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets. Analysts emphasize the fact that all market conditions are local and vary from area to area.

Home prices within metropolitan areas are more telling. The most recent data shows roughly half of the metro areas in the U.S. with price increases, with healthy gains in markets such as Oklahoma City and Trenton, N. J. "In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising," Yun said. "The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers."

NAR president Richard F. Gaylord, a broker in Long Beach, Calif., said that negotiation and knowledge are even more important in the current market. "Consumers need to be aware of local market conditions and comparable sales prices to have a clear picture of a home's value," he said.

"Realtors understanding of local markets, negotiating expertise, and transaction experience are invaluable to both buyers and sellers, today as much as ever."

Brought to you through the partnership of the Southeast Missourian and the Cape Girardeau County Board of Realtors.