Special offer

Have we finally reached the bottom of the housing market crisis?

By
Real Estate Agent with Star State Homes Realty TX Lic# 0519122

Have we finally reached the bottom?

by Tim and Julie Harris  

Sales of U.S. existing homes rose slightly in February for the first time since July 2007. However, prices posted a record drop from their year-ago level, but economists said it was unlikely the market had reached a bottom.

The National Association of Realtors on Monday said sales of previously owned homes rose 2.9 percent in February to a 5.03 million-unit annual rate, bucking expectations on Wall Street for a decrease.

While the rise broke a six-month streak of declining sales, prices continued to slip. The trade group said median prices fell 8.2 percent from their year-ago level to $195,900. It was the biggest year-to-year drop on record dating to 1968.

The heart of the housing crisis isn't about existing homes sales. The real issue is the millions of American homeowners who have no home equity or are upside down in their homes. For the millions of homeowners who are facing this situation the small up tick in home sales offers little solace.

The pick-up in existing home sales has helped cut into the bloated inventory of unsold homes on the market. NAR said the inventory fell 3 percent to 4.03 million units at the end of February. At February's sales pace that represented a 9.6 months' supply, the slimmest inventory since August but still high by historical standards.

It's important to remember that new home builder's massive inventories of unsold homes is not included in the NAR reports.

"That's not much of an improvement in inventory," said Gregory Miller, Chief Economist at SunTrust Banks in Atlanta. "As long as bank lending standards stay as tight as they have been, it will be a long correction process."

NAR also reported that sales decreased by 1.1 percent in the West, but were up 11.3 percent in the Northeast, 2.5 percent in the Midwest, and 2.1 percent in the South. Nationally, existing home sales have tumbled 23.8 percent over the past year.
Kim Sellers
Lake Arrowhead, CA Coldwell Banker - Lake Arrowhead, CA
Lake Arrowhead Realtor - BRE#01412099 - Lake Arrow
I think we are seeing a recovery in my area, it is about time.  This year is already looking to be a great year sales wise.
Apr 26, 2008 01:26 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F
I think we have bottomed out in Central Florida.  Inventories have flattened out and prices have come way down.
Apr 26, 2008 01:30 AM
June Piper-Brandon
Coldwell Banker Realty - Columbia, MD
Creating Generational Wealth Through Homeownership
The market has adjusted to a more normal pace.  This really isn't a bad market in Maryland anyway, our foreclosure rate is low, interest rates still low, housing prices adjusting to more normal level, and unemployment at an all time low.  It's too bad so many people listen to all the hype about a terrible housing crisis.
Apr 26, 2008 01:50 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos
Morning, Eric      Don't get too wrapped up in the less positive aspects of the market.  many people use the excuse that the " Absorption Rate" is so out of balance  Nonsense !  Your buyers don't care if there are 4 million units available !  They care about that nice place on a corner lot you showed them and whether or not they can afford it.
Apr 26, 2008 01:53 AM
Eric LaMay
Star State Homes Realty - Keller, TX
Star State Homes Realty

Moring Bill,

I thank you for your comments. However real estate is still a very localized market and the DFW area of Texas is one of the three strongest markets in the nation. We have been in a buyers market for years so any news (national or local) that is positive is good. I wish we would have gotten to see those golden days of sellers markets as a lot of professionals on the west, east and northern areas of the US. We all need to stick together to leave the public with as much of a positive attituded as possible. By doing this we will all weather whatever markets we may be in.

Apr 26, 2008 02:01 AM
Eric LaMay
Star State Homes Realty - Keller, TX
Star State Homes Realty

Dear June....................

 Thanks for the positive view on things. I wish more professionals had your attitude. All the negitive ones need to exit the market so we can turn this thing around.

Thanks again.

Apr 26, 2008 02:05 AM