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National home sales rise, but prices plummet

Sales of existing homes increased unexpectedly in February after six months of decline, but economists said it was too soon to say if the prolonged national housing slide is ending.

The National Association of Realtors said sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03-million units. It marked the first month-to-month sales increase since last July. But even with the gain, sales were still 23.8 percent below where they were a year ago.

The Tampa Bay area didn't share in the national housing market's unanticipated uptick. While single-family home sales did increase about 20 percent from January to February, the region routinely enjoys a selling spurt as the holidays make way for snowbird season. In fact, in recent years the month-to-month jump hovered around 30 percent, making this year an underperformer.

In the year-to-year comparison, homes sales in Pinellas, Pasco, Hillsborough and Hernando counties fell 29 percent, from 2,146 in February 2007 to 1,515 in February 2008.

The median sales price of those homes dipped 14 percent, from $207,400 to $178,900. Pinellas' home price decline wasn't as steep at 10 percent. But in Pasco, where suburban communities suffer more severely from a glut of unsold homes, median prices plunged 20 percent.

Nationally, the median sales price for single-family homes was down 8.7 percent from a year ago, the biggest decline in four decades.

Wall Street, which had been expecting another decline in sales, was encouraged by the February increase in the number of homes sold. Still, economists said they believed any sustained rebound is months away.

"The hemorrhaging has stopped, but the recovery will be long, slow and painful," said Bernard Baumohl, managing director of the Economic Outlook Group. "It's unlikely that we will see any sustained jump in home purchases, much less higher prices, until mid 2009 at the earliest."

And then there was Brian Bethune, an economist at Global Insight: "A quick bounce back in the housing markets is simply not in the cards."

Lawrence Yun, chief economist for the Realtors, said formerly hot markets in California and Florida were seeing significant price declines now as sellers are cutting prices to attract buyers.

Overall in Florida, sales declined 25 percent year over the year. Prices were off 16 percent statewide. Jacksonville, Miami and Ocala had the worst sales declines. Sarasota, where sales declined 10 percent, had one of the better showings, while sales in Fort Myers-Cape Coral were flat.

"We are not expecting a notable gain in existing-home sales until the second half of this year," Yun said.

He said that sales should be helped in coming months by recent moves to boost the loan limits on mortgages that can be insured by the Federal Housing Administration and purchased by Fannie Mae and Freddie Mac.

By region of the country, sales surged by 11.3 percent in the Northeast and were up 2.5 percent in the Midwest and 2.1 percent in the South. The only region of the country to see a sales decline was the West, where sales dropped by 1.1 percent.

The inventory of unsold homes dipped to 4.03-million units in February. That meant it would take 9.6 months to exhaust the supply of homes for sale at the February sales pace. That was down from January's level of 10.2 months but still about double what the months' supply had been during the peak of the housing boom.

After five years of strong housing appreciation, the steep downturn over the past two years has been made worse by a credit crunch. Lenders tightened standards in reaction to multibillion-dollar losses from homeowners failing to repay mortgages.

The housing slump has raised concerns about a possible recession. In this competitive election year, Democrats are pushing for greater efforts to stem a tidal wave of mortgage foreclosures to keep more unsold homes from being dumped on an already glutted market.

Times staff writer James Thorner contributed to this report.

>>By the numbers


Median sales price of

existing homes in Pinellas, Pasco, Hillsborough and Hernando, February 2007


Median sales price in the area, February 2008

-14 percent

Change in median price

• U.S., state numbers, 9A

National home sales rise, but prices plummet 03/24/08 [Last modified: Thursday, March 27, 2008 5:09pm]
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