Despite pent-up demand, existing-home sales slip
Existing-home sales data released Wednesday by the National Association of Realtors (NAR) declined slightly compared with the previous month but showed gains compared with a year ago.
February existing-home sales came in at a rate of 4.59 million, down 0.9% from 4.63 million in January. Compared with a year ago, completed transactions are 8.8% higher than February 2011.
Sales were up in the Midwest and South, offset by declines in the Northeast and West.
“The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market,” said Lawrence Yun, NAR chief economist. “Although relatively unusual, there will be rising demand for both rental space and homeownership this year. The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy.”
The national median existing-home price for all housing types was $156,600 in February, up 0.3% from February 2011. Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 34% of February sales (20% were foreclosures and 14% were short sales), down from 35% in January and 39% in February 2011.
NAHB weighs in on starts statistics
The National Association of Home Builders (NAHB) believes residential construction would be stronger if not for tight lending conditions and distressed property sales.
While the rate of February building permits were at their highest rate since October 2008, the total housing starts figure released yesterday was down 1.1% from January.
“Builders are reporting increased buyer interest and are expecting demand for new homes to improve in the coming months, but continue to exercise caution regarding new projects until that interest translates into more signed sales contracts,” noted Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Fla. “This process is certainly being slowed by today’s overly tight lending conditions, the difficulty of obtaining accurate appraisals on new construction and competition from distressed properties that can make it tough for prospective new-home buyers to sell an existing home.”
“NAHB’s most recent builder surveys have shown steady improvement in builder expectations for the next six months, and today’s report reflects that optimism in the permit numbers, which are up across the board and are typically the most statistically reliable data,” noted NAHB chief economist David Crowe. “At the same time, we believe that January’s exceptionally good weather was a factor in pulling some single-family starts activity forward that might otherwise have occurred in February.”
Following four consecutive months of gains, single-family starts declined 9.9% to a seasonally adjusted annual rate of 457,000 units in February. Meanwhile, multi-family starts, which tend to display greater volatility from month to month, gained 21.1% to a 241,000-unit rate — their fastest pace since November 2011.
Obit: President of Pacific Wood Preserving Companies
Dick Jackson, president and CEO of Pacific Wood Preserving Companies, died after a long battle with cancer, according to the Lumber Association of California and Nevada (LACN) newsletter.
The Pacific Wood Preserving Companies are one of the largest capacity wood products companies in the country, with treating plants in Oregon, California, Nevada and Arizona, as well as a manufacturing facility in Texas. Major products include treated wood utility poles, railroad ties, crane mats, fire-retardant treated wood and preservative-treated wood for construction.