Update: Signs of a bottom? National home sales show signs of life

Update: Home sales showed unexpected signs of life nationally in February, prompting talk that the housing market may be nearing a turnaround.

The AP: "After falling for six straight months, sales of existing homes posted an unexpected increase in February which may have reflected more aggressive price cutting by sellers in some parts of the country, a real estate trade group reported."

More, from the AP: "Analysts cautioned against reading too much into the one-month rise in sales. Many economists are predicting that the steep slump in housing will not bottom-out until later this year after prices fall further and allow huge levels of unsold inventories to be reduced."

An important local reminder: We've already seen the results for February sales in Los Angles, and there was no hint of a rebound in the February statistics from DataQuick: February sales in Los Angeles County were 45% below year-ago levels, and median sales prices were down 12.9%. So if you see some glimmer of hope in today's national numbers, remember, the L.A. numbers for February were awful.

More on today's numbers, from Reuters: "The pace of existing home sales in the United States rose in February to a 5.03 million-unit annual rate. ... February broke a six-month streak of decreasing home sales."

On prices: "Prices took a record fall ... an 8.2% decline in median home prices from a year ago. That drop to $195,900 was the sharpest since the trade group began keeping records in 1968."

The pace of annual sales rose from 4.89 million in January to 5.03 million in February, which is 24% below last February's pace of 6.60 million sales.

The National Association of Realtors' news release is here, including analysis from association economist Lawrence Yun: "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 [Federal Housing Administration] and conventional mortgages will unleash some pent-up demand.  As inventories are drawn down, prices in many markets should go positive later this year.”

Your thoughts? Comments? E-mail story tips to peter.viles.@latimes.com

Comments

[John]

Peter,

The bottom won't be here until 2011-2012. We've got several more waves of ARM readjustments that have to work their way through the system first.

The "bailouts" are going to be a non-issue, as unless we're going to switch to Soviet era socialized housing, the government doesn't have nearly enough $ to save the greedy and the stupid from their own greed and stupidity.

[Cal]

Prices down, sales up... isn't that Econ 101?

sfvrealestate : "Peter, is there any data for L.A. County?"

Err, Don't you have MLS access?

[Michael Snyder]

kat
Normally I'd suggest decaf but in your case I'd go for qualudes.

The real losses at Bear Stern's are being felt by the rank & file employees who just saw their life's savings and retirements go up in smoke. To be sure Mr. Spector's severance will be valued at ten times the offer now on the table for common stock, but that in no way justifies the vitriolic nonsense you chose to spew in this forum. If you're really so frustrated by your financial situation I'd suggest you get a better job. Ranting here doesn't do anything but display your deep seated neurosis.

150 multiple choice questions
What frustrates you so? Clearly you've never taken the first step towards a RE license or you wouldn't be so proud of your ignorance. I'm not particularly fond of attorneys, but I do know a few genuine advocates that are an exception to the rule. Perhaps you can get together with kat and do lunch.

I'm at least as angry as anybody else but I try (not always successfully) to look towards increased awareness and solutions. Why don't you try it sometime?

[Flaaash]

Peter, might be nice if you included all the finer detail in your story. As NationalBubble.com pointed out, it's down 1.1% in the west. This would mean that the West has definitely not hit ground yet. Price gains were region specific and I believe so are the price declines.

[Radical Raul]

Does this mean Echo Park and El Monte are still considered prime real estate?

[Flaaash]

Lawrence Yun did do his job:

1) to push RE value to its highest and for a good stretch of time.
2) prevent a dramatic housing crash. The fed are doing what they can for a soft landing and they feel Yun is part of that equation.

While the rest of us get screwed, the wall street cronies have made their millions and are off for a nice vacation before they jump on the next boom, commodities or currency trading, as the rest of us pay to clean up this mess.

[Fourth Generation]

This is just the spring bump that was anticipated a few months ago by many of the commenters in this very blog. In every housing downturn you will expect a bump where many rubes buy into the "bottom" of the run is here or near. In reality this is just a bump of little consequence for the ultimate price correction in the market that will continue for a while. Buy now and be sorry a few months down the road.

[Corntrollio]

I like how NAR is seizing on any minimal worthless statistic they can. I was listening to NPR this morning and they had one guy from NAR and one guy from DataQuick on today.

My favorite moment was when someone called in and said (paraphrase): Isn't it the case that YOY statistics, which are the important stat, are way down? I don't see how month to month means anything, and we should be observing year-to-year which significantly dropped. I also don't understand why you keep having shills from NAR keep telling us how great the market is every month when month after month their predictions are ridiculously wrong.

The NAR guy only responded with repeating his talking points, saying "these aren't predictions, these are statistics. Sales went up 2.9%." The DataQuick guy basically said, "yeah, NAR is full of it," although certainly not in so many words.

It was great radio, my friends.

[kat]

Michael Snyder,

Wow! What's it like being you? Do you just wake up in the morning all goose pimply knowing you get to be you for another day?

Anyone with a brain should be incensed over this deal. To see greedy, stupid people rewarded with tax payer money should make any one angry. To hear people living in $750,000 houses play the victims should make any responsible person angry.

You can wow me all you want with your financial acumen but the facts are still the same. Bear Stearns got in trouble speculating on sub prime loans. You can call them "mortgage backed securities" or whatever the hell you want but BS (good initials) is in the position it's in because it was blinded by greed to the point that math, basic economics and all common sense went out the window.

This whole deal amounts to no more than a sophisticated check kiting scheme and guess who got left with the last bad check which means they got left with all of them?

Yes, the tax payer. Now the people with overpriced homes, the speculators, and the other scum who caused this mess are standing around with their hands stuck out like a bunch of uninsured flood victims.

This should make anyone angry - except people who caused it, like you.

[Michael Snyder]

kat,
There's a reason assume is spelled ass-u-me. Congratulations! You've made the first syllable. O' yea, just for the record, being me is a pain, but it's all I've got.

[kat]

MS,

I could say the same for you. I like my job and don't have any complaints about my financial situation - except the same complaint everyone has. And yes, when someone takes the moral high road in defense of sleaze mongers who are costing the econmy and tax payers billions I get the distinct feeling he or she is a culprit. Dummy me!

[firesale]

Please, remember...

DEAD CATS BOUNCE!
DEAD CATS BOUNCE!!
DEAD CATS BOUNCE!!!

Thank you.

[SavedbyGrace]

Incredible.

Does anyone still believe anything that comes from the NAR? How many more times do we have to hear them call "bottom" before it really does hit bottom?

[kat]

P.S.

I will be glad to eat crow if someone credible, not some psuedo economics expert with a RE license (they remind me of notaries who are experts in contract law) will correct me on what the difference between what Bear Sterns and their ilk did and this:

http://en.wikipedia.org/wiki/Check_fraud

Pay particular attention to the "funds that do not exist" part.

Then tell me and the rest of the fiscally responsible people in California and the rest of the country why we should not be furious.

[Inland Empire]

To hear people living in $750,000 houses play the victims should make any responsible person angry.

Unlike those other victims living out of the LA area in their $300 trailers who like to rant and rave on this blog.

[DF]

It seems to me that the best indication whether these stats are meaningful is to compare them to last year. Was there an uptick in home sales around March of 2007? I'd be surprised if there weren't; and yet, that wouldn't have evidenced a bottoming-out but only a brief upturn in an otherwise declining market.

Anyway, if anyone has these stats, I'd be interested to see them. Thx.

[peteviles]

sfvrealestate asked, "Peter, is there any data for L.A. County?"

SFV, thanks. Yes, there is data, it came from DataQuick earlier this month, and it was awful -- sales down 45% from February 07 levels, prices down 12.9%. I've added that into the article to make it as clear as I can; if there are signs of recovery in the housing market somewhere in America, those signs are not yet evident in Los Angeles.

[Mousebender]

Get the original data here.

NAR news release: http://preview.tinyurl.com/2j3jkg

Data in PDF format: http://preview.tinyurl.com/2uluts

Comparing February 2007 and February 2008, both seasonally-adjusted and non-seasonally-adjusted sales for the month are down substantially, by double-digits of percent.

This is true for the entire US, as well as for all regions of the country: Northeast, Midwest, South and West.

This is a continuing nationwide free fall, not a recovery.

[alvin]

kat,
while it's possible that at some point, well down the road, the bear "bailout" could end up costing tax payers money, the grand total so far is zero.

the fed doesn't spend tax payers money. congress does. until congress has to step in and save the fed, concentrate on finding some deals before this summer's "frenzy"...

[MyLessThanPrimeBeef]

Monk: Master, master, I think that Viagra pill worked. It's moving! I can hear it!

Master: Let's say the housing market makes a bottom, but if there are no buyers around able to afford it, does it make a sound?

[Cal]

The CAR report is out on CAR.org but it's just a subset of the DQ news report.

[150 multiple choice questions]

Actually, Michael, I do have my real estate license... that's why I mock. (a club that will let me in, I don't want to be a member!) It took about two hours of studying (internet course), a 5th grade knowledge of math and 150 multiple choice questions - of which I think you have to get like 8 right (okay, I think it's really 70%). The worst thing is the stat I often hear but don't know for sure of 50% of people taking the test fail.

Having a your real estate license is less impressive than having your drivers license. They have no special knowledge, no insight, no understanding of markets or finance or risk and I just wish more people trusting them with their financial lives understood these facts. THAT'S what makes me so angry. That the overwhelming majority of realtors only care about closing a deal and gaming the market (led by the NAR!) at any and all costs to those they "serve".

[dreadlord]

DQ reports LA Sales down 34.3 percent from last year. Slowest February since 1988, when they begin to track these numbers.

http://www.dqnews.com/News/California/
RRCA080314.aspx

To repeat NAR numbers is just repeating a lie.

[IToldu2CashOut]

i was looking at homes this weekend without my agent, it happens that the ones I was looking at I had a descent amount of inside information on specific negative details. In the case of both houses the sales agent very bluntly lied to my face about very specific questions. If I was a regular buyer I would have had no idea I had been lied to.

Is this goes to show you what scum these people are in the NAR. Isn't there any ethics at all in the profession? Are there laws against lying to buyers?

[NoWayinLA]

Like most cheerleaders, Lawrence Yun is clueless about the world around him. Somehow he has confused "pent-up demand" for him to stop talking in public with demand for housing.