Home Prices Drop Year

The median price of all types of homes sold in February, at $363,000, was down 0.2% from February 2022, according to the National Association of Realtors today. This was the first year-over-year decline since February 2012, when the market emerged from Housing Bust 1 (going into Housing Bust 1, the first year-over-year decline occurred in August 2006).

The year-over-year decline came despite a small uptick in the median price from January. But that uptick was far smaller than the increase a year ago, and so year-over-year, the price dropped (historic data via YCharts):

The median price of single-family houses fell 0.7% year-over-year; but condo prices were still up 2.5% year-over-year.

Lower prices will help unfreeze the market, and that’s starting to happen, if barely: “We’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs,” the report by the National Association of Realtors noted.

The median price has fallen by 12.3% from the seasonal peak in June 2022, (historic data via YCharts).

Sales of previously owned homes rose by 14.5% from deep-dismal in January, which had been the lowest sales since 2010 during Housing Bust 1, to a seasonally adjusted annual rate of sales of a still dismal 4.58 million homes. The increase came after 12 months in a row of month-to-month declines.

Year-over-year, sales were down by 22.6%. Compared to February two years ago, sales were down 25.8%.

Priced right, just about any property will sell. But not enough sellers are wanting to price their properties right just yet.

Actual sales in January – not seasonally adjusted, and not as annual rate – rose to 271,000 properties, down 23% from a year ago:

Sales of single-family houses, based on the seasonally adjusted annual rate, rose 15.3% from January, to 4.14 million houses, which was still down 21.4% year-over-year.

Sales of condos and co-ops, based on the seasonally adjusted annual rate, rose 7.3% from January, to 440,000 units, which was down 32.3% year-over-year.

By region, year-over-year sales plunged in all regions (percent change from year ago, map via NAR):

All-cash buyers – often investors and second home buyers – rose to about 76,000 properties (28% share of 271,000 actual sales), from January’s roughly 67,000 properties (29% share of 231,000 actual sales).

Median days on the market before the property is sold or the seller pulls the property off the market, at 67 days, was up by 50% from a year ago (data via realtor.com):

Months supply, at 2.6 months, while still low by historical standards, was up by 50% from a year ago.

Active listings (= total listed inventory minus properties with pending sales), at 578,000 properties, were up by 68% from a year ago. In absolute numbers, active listings remained low by historical standards, as potential sellers are still trying to outwait the increase in mortgage rates, and as many potential buyers have pulled back (data via realtor.com):

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