Feb. Home Sales Increase +5.1%, Highest Since '03
The Wall Street Journal reports that "Existing-Home Sales Rebound, But Prices Plunge":
Existing-home sales rebounded in February, climbing above expectations, but prices plunged again. Home resales climbed to a 4.72 million annual rate, a 5.1% increase from January's unrevised 4.49 million annual pace, the National Association of Realtors (NAR) said today (data here).
The February resales level of 4.72 million reported Monday by NAR was above Wall Street expectations of a 4.48 million sales rate for previously owned homes. The 5.1% increase was the largest since 5.6% in July 2003.
MP: Alternative headline would be "Existing-Home Sales Rebound, BECAUSE Prices Plunge: The Law of Demand Works."
1 Comments:
Don't get excited. The short form of the explanation for the rising prices in California in terms of "average resale" is extremely bad; foreclosures are now moving "up-market" - that is, having cleaned out all the "Starter Homes" we're now seeing the middle-market and higher homes go into foreclosure and as a consequence this "improvement" is actually a marker for severe distress in the broader economy in California.
Contrary to initial appearance this isn't "good" for the housing market, its bad! When the $200,000 houses are getting foreclosed it's "more or less ordinary Americans" getting nailed - when its the $1 million houses that's the executives and other "nouveau riche" types, and along with the house will go to the BMWs and Hummers.
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