Existing Home Sales Bucked National Trend In February
Existing home sales in Tallahassee bucked the national trend in February by rising for a second consecutive month. February existing home sales were up 28% compared to February 2010, which following the 61% rise in January has made for a great start to the 2011 housing market. But don't pop the corks on the champagne bottles just yet.
In the real estate graph above, we see vertical bars representing a gaining month when they move above the 0% axis, or a declining month when below the 0% axis. These two months of gains have been well earned, having followed 6 consecutive months where significant declines were recorded after the termination of the Homebuyer Tax Credit in June 2010.
US Existing Home Sales Not So Vibrant
Yesterday, the National Association of REALTORS® published the February Existing Home Sales Report and noted sales
dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.
Regarding the drop, Lawrence Yun, Chief Spin-ologist (Economist) for NAR, had this to say:
“Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,”
Perhaps he believes the housing market is tumbling because a Secret Society of Evil Property Appraisers has launched a strike against the housing market? I don't think so.
The housing market is simply in a correction cycle. We grossly over-built homes in most US cities for a five year period, and until that supply of homes is brought back down to normal levels (read that as to say "scarcity" becomes a threat to buyers), then our market will continue to see devaluation and reticent buyers who are overwhelmed with the opportunities in front of them.
Future Tallahassee Existing Home Sales
Earlier I mentioned it was too early to start celebrating our two-month run on gains in existing home sales in Tallahassee. It's been my experience that home sales results in Tallahassee mirror the national results, but with a lag effect. Meaning what has happened elsewhere recently, will most likely start happening here soon.
Additionally, we are seeing a downward trend in pending home sales and we are fast approaching the one-year anniversary to the end of the Homebuyer Tax Credit. Most of the market indications have me anticipating a decline in the coming months for existing home sales in Tallahassee.