Existing home sales saw a surprising 5-percent spike in February for a total of 4.72 million units vs. 4.49 million in January.
Economists expected home sales to decline to 4.45 million in February.
CNN reports that activity was particularly strong in the West.
(Confession: When the realtor on Saturday told me they were “extremely busy,” I thought he might be full of it.)
That said, the increase of 5% is compared to January, not year-over-year sales which is the better gauge because it takes seasonality into account. Comparing January to February is like comparing apples to oranges. Better to compare January to year ago January.
Also, important to note: homes were still bought for cheap. The median home price of $165,400 in February was down 15.5% from last year’s median price of $195,800.
If February’s home-buying pace continued, it would only take an estimated 9.7 months to sell down inventory of properties.
Some big shot (if you must know, Ian Shepherdson, chief U.S. economist at High Frequency Economics) says there’s a “good chance” the collapse in home sales that has been going on since September is “now over.”
Pundits. They also thought February sales would see a decline.
But could Obama’s new toxic-assets-clean-up plan, and the home shopping spree seen in February be telltale signs that the bust will soon be over?
I have my doubts…
Ywee said,
March 23, 2009 @ 6:59 pm
I don’t think it will be over that quickly. You will probably see more foreigners buying homes out here but the U.S. residents are still too broke to buy a home. So sad =(. I hear of more and more people I know being laid off and it’s scary. They just laid off some people at my work too. How can people buy homes if they have no income to pay for a mortgage? They should divide the “toxic-assets-clean-up funds” amongst all the tax paying citizens so they can pay off their debts and put a down payment to buy a home =). Only if it were that easy…
dylee160 said,
March 23, 2009 @ 7:06 pm
It’s very true. I just had dinner with a couple who almost bought three weeks ago. But the hubby, a teacher, received a pink slip notifying he might be laid off soon. So they are glad they didn’t buy. That said, economists believe the key to ending the economic crisis is stabilizing the housing market. It’s all very connected – and very confusing. Nobody knows for sure. Experts are proven wrong in their conjectures, time and time again.