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Tuesday, March 15, 2011

Lawler: Early Read on February Existing Home Sales

by Calculated Risk on 3/15/2011 10:24:00 PM

From economist Tom Lawler:

Based on available local MLS sales stats, I estimate that US existing home sales this February were down very slightly from last February’s pace on an unadjusted basis. Assuming that this February’s seasonal factor is little changed from last February’s (which is what I expect), existing home sales on a seasonally adjusted basis should come in at an annual rate of around 5.0 million, which would be down about 6.7% from January’s pace, though January sales seemed a bit high relative to my local tracking. Such a drop seems large relative to the pending home sales index in the previous few months, though adverse weather in many parts of the country appear to have delayed closings and may account for some of this “discrepancy.”

On the “inventory” front, local MLS data suggest that on aggregate existing home listings were little changed to a tad down from January, despite the normal seasonal increase. If the NAR reports flat existing home inventories for February relative to January, then inventories will show a decline from a year ago – which would be consistent with local MLS reports (in aggregate). A caution here, however: the NAR’s reported monthly drop in inventories exceeded my tracking, and in the past the NAR’s monthly increase in February has exceeded estimates based on local tracking.
CR notes:
• This would put the months-of-supply around 8 months, up from the 7.6 months reported in January.
• This is before the new "benchmark revision" that will be released this summer. I expect the benchmark revision to show significantly lower sales for the last few years.

Empire State Manufacturing Survey indicates faster growth in March
NAHB Builder Confidence increases slightly in March, Still depressed
Residential Remodeling Index shows strong increase year-over-year