Existing home sales were reported down a relatively small about in weather-ravaged February to an annual level just over 5 million. However, there were some interesting and somewhat surprising changes in the components of that total.
For one, the regional breakout for single family homes was in reverse of what the extraordinary weather patterns would have predicted. Sales were up in the snow-battered Northeast and down in the more even-keeled weather region in the West. Sales were down in the South, which did experience abnormal weather. The rising inventory of single family homes for sale also suggests households that have waited for several years to move are putting their homes on the market.
For another, condo sales jumped almost 5% from an unusually low January and increased or remained level in all regions. More importantly, the existing condo inventory surged to 599,000, which increased the month’s supply to over 11 months. Given a significant share of existing homes are being sold for cash, these two trends suggest a high level of investor interest in existing condos.
The extended and expanded home buyer tax credit have yet to make a significant impact on sales but the deadline has two more months of data and I expect to see existing home sales to increase in order to beat that deadline and then taper off for a couple of months as sales advance from late Spring and early summer into the qualification period.