February Existing Home Sales Fell 23.8%

Today’s fictional headline, via The Onion, National Association of Realtors: "Sales of existing homes increased in February and remain within a fairly stable range."

Why is this fictional? Changes from January to February are measuring seasonal differences, not actual improvements. January is one of the slowest months of the year for
home sales. (We would never report retail sales from December to January
this way; We always use year over year data).

What dos that show Year over year changes showed that single family home sales were 23.8% below February 2007 levels.

The national median sales price was also a big surprise, freefalling down 8.2%.

Single-family home sales decreased 22.9%, while the median existing single-family home price was $193,900 in February, down 8.7% from year ago prices.

The best news in the release was the 3% decrease in total housing inventory. At the end of February, there were 4.03 million homes for sale — 9.96-month supply.

(NOTE: The original NAR report was correct)



graphic courtesy of Barron’s Econoday


UPDATE: March 24, 2008, 11:27am

I think both the WSJ and Bloomberg got this wrong:

Home Resales Rose 2.9% Last Month As Median Price Dropped 8.2%

U.S. Economy: Existing-Home Sales Rise, Prices Fall   


Existing Home Sales Rise In February
National Association of Realtors, March 24, 2008



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  1. Lawrence Yun commented on Mar 24

    Your reliance on numbers, facts, and reality is crimping my spin. I’m the best, you know.

    Trust me: this housing “downturn” (as if), is just a bump in the road to permanent wealth for every man, woman, and child on the planet.

  2. Drew commented on Mar 24

    Interesting…from Calculated Risk:

    “NOTE: NAR reported months of supply incorrectly at 9.6 months (shown on graph). To calculate months of supply, you divide inventory (4.03 million) by sales (5.03 million) and multiply by 12.

    This follows the highest year end months of supply since 1982 (the all time record of 11.5 months of supply). Even if inventory levels stabilize, the months of supply could continue to rise – and possibly rise significantly – if sales continue to decline.”

  3. Bear Stearns Idiots commented on Mar 24


    “Everything is Relative” (Einstein’s theory of relativity)
    Do not look at a rear view mirror and concentrate exclusively on everything negative for your investments.

    P.S. Some of your readers have bought XHB in January (during January panic hysteria and bear euphoria/complacency) and even some bought BSC at $2.95 last week while you called them “idiots buying”. These idiots have made 50% and 300% respectively.
    Do you have similar returns from your bearish bets? I guess everything is relative Barry.

  4. edhopper commented on Mar 24

    Bear Sterns Idiot.
    Except if the Fed balks at this bit of extortion by BS and Bear Sterns goes bankrupt. Then they will be holding stock worth exactly zero.

  5. Ross commented on Mar 24

    So, it seems the Fed did bail out BSC after all. They couldn’t admit it at the time. So much for moral hazzard. The Greenspan/Bernake put LIVES!

    Gotta love Cramer. “The American public knows NOTHING”. He then came back to explain that he didn’t mean what he never said. Amazing.

    Back on topic, I just changed my witholding
    to reflect the 25 extra dependents I’ve recently acquired. That nets out my witholding to zero. I figure if no one else is paying, why should I?

  6. michael schumacher commented on Mar 24

    Now the FED is backstopping losses at BSC through an LLC?

    Fucking ridiculous…..

    Today’s “happy Bomb” was a bit much even for this market.

    Totally disconnected from any form of reality…


  7. Drew commented on Mar 24

    Oops… Calculated Risk admitted a mistake on the inventory calculations. The NAR was right, they were wrong about inventory levels.

  8. wnsrfr commented on Mar 24

    Bear Stearns Idiot,

    Just curious, if you weren’t one of the big bond holders, what tipped you off that the $2 price could go up? What were you betting to have happen?

  9. michael schumacher commented on Mar 24

    you know in doing MY taxes, based on today’s news I just “happened” to find a lot of losses I never had before. please tell me how that is any different from what is now playing out in “socialism for the already rich land” today.


  10. cinefoz commented on Mar 24

    I see a decrease in volume over last year, but a significant uptick over last month. So can anybody else who actually reads the graph. One month does not make a trend but up is still up, no matter how you want to spin it. Even the WSJ editorial page is going back to spin-o-matic. World back to normal.

    On a brighter note, Ali Velshi at CNN appears to be working harder. Maybe his editors are giving him more air time. I hope this is a continuing trend. This morning, he noted that about 80% of homeowners report the value of their home is higher than it was 5 years ago. The big losers are people who moved recently and, I assume, California tulip speculators.

    Combining this with the fact that variable rate repricings will lower monthly costs for many home owners, and this is very good news.

  11. Andrew Foland commented on Mar 24

    My pet peeve is that every time someone shows a zero-suppressed plot, they should explicitly mention in the text that it is a zero-suppressed plot…

  12. Mr. Obvious commented on Mar 24

    I see a decrease in volume over last year, but a significant uptick over last month. So can anybody else who actually reads the graph.
    I’m sure you also noticed, but chose to ignore, the fact that the volume every Feb is higher than that of Jan. Just don’t look at march and April, though, cause that doesn’t help your position….

  13. Peter B commented on Mar 24

    Months supply fell to 9.6 from 10.2. The recent high was 10.5 in Oct which was the highest since 1985. Single family months supply fell to 9.2 from 10 partially offset by a rise in condos/co-ops which rose to 13 from 11.8, a new high in this cycle. The median home price fell 8.2% y/o/y and 1.9% sequentially to $195,900, the lowest level since May ’04.

    Bottom line, lower prices are bringing out the buyers, relatively speaking, but the question remains of how much lower prices need to drop since inventories are still twice the normal level.

  14. Denis Pitcher commented on Mar 24

    Hey Barry,

    Not sure if you’ve seen this one yet but a friend passed on this link tracking weekly changes in housing inventory + median pricing by state/area



  15. larster commented on Mar 24

    Now that the FHLB can own more mgt based paper, are we going to see an implosion of all this paper throughout our “financial system”? The fed owns gobs through the TAF facility and the BSC backstop, FHLB is now in for $100 billion, Fannie and Freddie are now creating more shaky loans, and I haven’t even listed that which is held by I banks and C banks. How can anyone’s proposal to alleviate this problem (Frank, etc) deal with paper that is held by all these various entities? How does the FHLB mitigate a mortgage? What a mess.

  16. Bear Stearns Idiots commented on Mar 24

    ***edhopper and wnsrfr***

    My last week’s posts here are self-explanatory…

    Bear Stearns Idiots:

    (17-Mar-08) “Barry, I have happened to be one of those BSC buying idiots (loaded up on BSC between $2.95-3.00).”

    (17-Mar-08) “The deal does not reflect the fundamental value of BSC (because of the credit crisis there were no other bidders except JPM and they got BSC for a song). The price is less than BSC real estate holdings. I am betting on BSC shareholders voting against the deal unless JPM agrees to pay more.”

    (18-Mar-08) “The shareholders can keep blocking the deal at least for a year, and then you might get litigations for another 3-5 years. JPM realizes it and should pay more or there might be another bidder. If the credit markets rebound within a year, Bear Stearns might be resurrected (if this is the case, I will make crazy money).”

    (18-Mar-08) “Did you read WSJ article today? JPM was ready to pay “lower double digits” for BSC, but because there were no other bidders and the Fed was pressuring BSC to make this deal before the markets open in Asia (Sunday night) JPM got BSC for a song. I think (betting) the shareholders will force JPM to pay more (either voluntary or via litigation).”

    (18-Mar-08) “I am making more now on BSC long side than the bears that shorted the stock on Friday. (>100% within 24 hours). Who was saying that you need only to short stocks in this market to make money? I had a sell order at $7.99 (170% gains) for a half of my holdings. It was executed. I did not sell the second half (free money). I will speculate with it. I think (betting) the shareholders will force JPM to pay ‘lower double digits’ (either voluntary or via litigation).”

  17. bluestatedon commented on Mar 24

    Anyone know if cancellations are reflected in the existing home figures? And are cancellations in existing home sales insignificant in relation to those in the new home category?

  18. michael schumacher commented on Mar 24

    as previously stated this current situation is un-fixable if the system that designed it is allowed to continue to operate as if it never happened. Today’s “happy bomb” news item is just yet the latest installment of trying to keep the system the way it was.

    Long Live investing prowess that is based solely on fee collection and “up”…….

    Because that is CERTAINLY what is at work at this point.


  19. PureGuesswork commented on Mar 24

    Oh boy, in her major speech on the housing crisis today, Hillary called on Bush to convene a “special commission” to deal with it. And–get this–to show how serious she is she wants Greenspan to be a prominent part of this commission, if not its chairman! Wow, back to the future. Or, on to the past, or something. I am amazed at such cluelessness.

  20. Eric Davis commented on Mar 24

    Thanks barry… needed some Bearishness/reality today ….

  21. VennData commented on Mar 24

    Yun predicted a housing sale increase this year (ignore the median price downdraft, that’s more statistical mumbo jumbo. Statistics always lie, right? Just feel the market coming back.)

    Looks like a repeat of his illustrious award in 2008. Yun for Fed Chairman in 2010.

  22. scj022 commented on Mar 24

    the sales figures only count signed contracts not actual closings. seems a better way to gauge home sales would be to get actual recorded sales from the counties, villages, etc.

  23. Bruce commented on Mar 24

    What ever happened to the insider trading laws the wimps at the SEC are supposed to enforce? Where is the Sherman Anti-Trust act against price fixing and collusion? Bear Stearns share holders should be suing the Federal Reserve and the US Treasury.

  24. patient renter commented on Mar 24

    I should mention, I heard this headline from the NAR reported on NPR this morning with the commentator making some comment like “this could mean the bottom”. Seriously?

  25. pmorrisonfl commented on Mar 24

    > This morning, he noted that about 80% of homeowners report the value of their home is higher than it was 5 years ago.

    True enough, but I suspect that’s not the whole story, based on my experience.

    Two anecdotal, but concrete examples:
    South Florida Townhouse I Used to own:
    new in 1999 for 99,000
    I bought in 2001 for 140,000
    appraised at 186,000 in 2003 refi
    sold in August 2005 for 309,000
    recent comp sales in the neighborhood: 260,000

    Notice that it is worth more than it was five years ago.
    Notice also that the current owner is upside down ~50,000 dollars, even though the house is worth more.

    SFH that replaced the townhouse:
    bought in 2000 for 160,000
    I bought in 2004 for 280,000
    [ Wish I woulda sold for 400k+ in 2005]
    sold in August 2007 for $365,000
    larger places nearby just sold for $320,000

    Notice that it is worth more than it was five years ago.
    Notice also that the current owner is possibly upside down.

    Similar comments apply if a house has consistent ownership, but the owner took cash out during the boom.

    For me, I’m glad we got out in time, I worry that we’ve helped wreck the economy, and I look forward to the day when we can own instead of rent.
    But I personally don’t think it’ll be this year.

    This is my story; I bet there are enough others like it to be statistically signifcant.

  26. Dee Leverage commented on Mar 24

    Dick Bove, subject of BR praise this weekend, said on CNBC today, “Bear Stearns is worth ZERO”…discuss.

  27. ValueWatch commented on Mar 24

    NAR reporting housing inventory down may be true. Why? Because there are so many listings expiring, being cancelled, foreclosed on, deeded back to the bank, rented, etc.. At this point in history, these figures mean absolutely ZERO. As a real estate Appraiser, we can not rely on the crap that NAR has been spouting as facts and “good news”.

    Analogy time…Do we ask the fox to give us an accounting of how many chickens are left in the hen house?

    NAR also reports fabricated numbers of 8-9% decline in median price. WHAT?? Every study our firm has done indicates a year over year depreciation is in the 20% range. JUST SO FAR!!

    Who do you people choose to believe? The Feds? The Treasury? Wall Street ratings firms? Wall Street brokerages with their MBSs and back-breaking derivitive loads? Maybe the Countrywides of the world?

    They tell you what you want to hear. They show you what they want you to see.

    This has been, and continues to be, the largest criminal perpetration on the American public (worldwide) of all time. Other counties are now catching on and trying to quantify just how horribly they’ve been duped. When they find out shit is going to hit the fan…US is the fan people. As if we’ve not pissed off enough people in this world already. We just had to go and piss-off and ripp-off the rest of them too? Holy s#@%!! This nation has been been led down the most dead end of dead ends by criminal IDIOTS!!!

    Our pompous, holier-than-thou, we’re making you money so shut your damn mouth, do as I say or we’ll make you do as we say attitude has not translated well. Our government’s do what you want attitude toward our Banks and Wall Street may have finally stepped over that line.




  28. ac commented on Mar 24

    They are going to go tanky in March. Nasty it will be.

  29. Jeff commented on Mar 24

    The concern about the seasonal comparison and everyone else making a mistake is not correct.

    The data in the report are seasonally adjusted to an annual rate. This is to allow comparison of months like January and February.

    These month-to-month changes are of more current interest than comparing this year to last year.

  30. ac commented on Mar 24

    Yup and February 2007 had the same “jump”(even bigger actually) in sales.

    It is ALL seasonal adjustment. Just like they will plop in March.

    April,May and June will be the interesting timeframes. If they are down to 4, NAR will capitulate and finally give up. That is what is needed.

  31. Randy commented on Mar 24

    We need statistics on number of idiots who still believe housing is a good investment now. The numbers are going down as some of them wake up or buy a nicely priced 1 bedroom condo for $400,000 and expect to get a return soon. But one should never underestimate the number of idiots around.

  32. Pool Shark commented on Mar 24

    Being a leapyear, February, 2008 had an extra day in it…

    The NAR needs to revise its numbers down by 3.57%.

  33. Chuck commented on Mar 24

    The NAR is as reliable as the Bush Administration any idiot believing any data from the NAR is doomed to fail. If indeed any gain in existing sales raises a question at what huge discounts these homes where unloaded for? Nobody should be buying Real Estate, residential or commercial or securities, the bottom-line the Bush Administration has outsourced more jobs than created and that’s the main reason that this market won’t recover anytime soon it’s much cheaper and safer to rent, patience is a virtue.

  34. VJ commented on Mar 24


    Oh boy, in her major speech on the housing crisis today, Hillary called on Bush to convene a ‘special commission’ to deal with it. And–get this–to show how serious she is she wants Greenspan to be a prominent part of this commission…

    I’m assuming that was merely a bone she was throwing to the Republicans. Her primary candidate for the panel is Robert Rubin, likely the best Treasury Secretary since Alexander Hamilton.


    As to the NAR, they obviously have the same bottled water spiked with Purple Kool-Aid delivered as the White House does.

  35. sloppy commented on Mar 24


    Love your blog, but your’re getting sloppy with you analysis/numbers. Two examples from your recent posts

    [Your analysis of median house price to personal expense on rent ratio]

    You have made no adjustment to control for mortgage interest rates, which declined significantly over the same period.

    The better comparison is cost to rent vs. cost to own (your mortgage payment and maybe maintenance/taxes to be precise). This is the principle behind Moody’s and other’s affordability metrics which show that homes are less affordable than 2002-4, but still significantly lower than earlier periods. I’m not disputing that we’re in for a further downturn in housing, but this will be from de-leveraging (banks requiring higher LTVs) and higher mortgage rates.

    Compounding the problem, the declines in long-term interest have been incorporated into your rent metric, used in the denominator. As long-term debt rates declined, cap rates declined, rents declined (relative to the rented asset value), and you are able to rent a larger asset at the same price.

    Show me the ratio of mortgage rate * median home price vs. rent over time and I’ll be happy and you’ll arrive at a less hysterical, but still negative answer.

    [This post]
    NAR reported numbers are reported on seasonally adjusted basis, so your main point is moot without understanding what the seasonal adjustment factors:

    1) I too would expect UNADJUSTED February sales to higher than January due to the holidays, etc. If true, undoing the seasonal adjustment would show a larger month over month increase in unit sales. [Anyone know the actual adjustment factors, NAR claims to use BLS methodology]

    2) The Feb=29 days is a curious comment, that potentially could be overstating sales.

  36. chuck22b commented on Mar 27

    what part of SEASONALLY ADJUSTED, ANNUAL Rate do you guys not understand? That means seasonality has been accounted for, AND leap year has been accounted for. So, sales did rise between February and January ’08 by 2.9%.

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