However, the deeper story painted is not a promising sign.
Consider:
- over 45% of the sales were foreclosures or short sales
- median existing home prices fell 15.5% (in one month)
- inventories rose 5.2%
- most of the increase was concentrated in the Northeast, with the South also doing ok
The picture painted is one where newly desperate homeowners are joining the existing desperate homeowners selling into a terrible market and the market is flushing itself out with increasingly severe price cuts. February should be viewed as a brief break before the housing market continues to plunge. The significance of the increases being located mostly in the Northeast can be attributed to many things but one explanation that seems the most credible is that the unemployment picture is not as bad as the industrial heavy MidWest or the tech heavy West coast.
This is a key number to watch in the upcoming months as it will be a key indication of the effectiveness of the Fed and Treasury's recent moves. A housing market does not a recovery make but the story it tells should be a strong indicator of the bottom. Sphere: Related Content
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2 comments:
Wall St LOVES the Geinther toxic asset plan, it made the market jump almost 500 points!. Go buy a 2nd or 3rd home now before it's too late!
yoy numbers are actually not too bad (see below from the nytimes). NE is probably bouncing before a bigger fall, but the west may be bottoming...
In the West, where home prices have dropped 30 percent from last February, homes sales rose 30 percent last month from a year earlier. In the Northeast, where housing prices have only dropped 4.8 percent, to $251,200, over the last year, sales are down 15 percent for the year. “The areas that fall the fastest are going to recover,” said Guy Cecala, publisher of Inside Mortgage Finance. “There’s going to be a floor established. Seven hundred thousand dollar houses are $250,000 — that’s what’s bringing people back into the markets.”
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