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Realtor Study Says Market May Be Cooling, but Slowly
By VIKAS BAJAJ
The housing market is not slowing as fast as economists expected, according to a report yesterday, but some say the data suggest a more pronounced contraction in the next few months.
In a report that carried mixed signals, the National Association of Realtors said sales of existing homes edged up last month, the number of homes for sale rose markedly and prices increased more slowly.
Sales of existing homes, which make up about 85 percent of all homes sold, increased 0.3 percent in March, to an annual pace of 6.92 million. That was higher than the 6.9 million pace in February and the 6.57 million pace in January but lower than the 6.97 million pace in March 2005. Sales were up in the Northeast and Midwest but dropped slightly in the West and South.
Economists expected sales to fall to a pace of 6.66 million, according to a survey by Bloomberg News.
The national median selling price — half the homes sold for more and half for less — was $218,000, up 7.4 percent from a year earlier. The increase was smaller than the 9.5 percent gain in February and the 11.7 percent increase in January.
The number of homes on the market rose 7 percent, to 3.2 million. At the current sales pace, that amounts to a 5.8-month supply, up from 5.5 months in February and four months in March 2005. Economists say the rising number of homes on the market makes it harder for sellers to demand higher prices, as buyers take advantage of greater choice and their increased bargaining power.
"The bidding fever that was present a year or so ago has all but disappeared, and that's another sign that this market is slowing," said Anthony Chan, chief economist at J. P. Morgan's private client services group.
Starting late last year, buyers and sellers of homes, particularly in the East and West Coast markets, appeared to be staring each other down. Many buyers, sensing a slowdown coming, said they were holding out for a better deal, while sellers, believing they still controlled the market, refused to cut their prices.
The increase in sales in February and March indicate that the standoff is easing as sellers cut asking prices to lure buyers, economists said.
Real estate speculators in particular were affected, said David Lereah, chief economist for the Realtors. In many Florida and California cities, he said, investors who bought condominiums and other property in a bid to make a quick profit are scrambling to unload them as interest rates rise. The average rate for a 30-year fixed mortgage was 6.32 percent in March, up from 6.25 percent in February. "They are all leaving at once, particularly in Miami and Naples and some of the California markets," he said.
Mr. Lereah said the small sales increases in the last two months were temporary. "Interest rates have gone up and we will see sales come down a little more," he said.
Separately, the Conference Board said that consumer confidence rose to its highest level since May 2002 as Americans felt more optimistic about the job market. The index registered 109.6 this month, up from 107.5 in March.
Realtor Study Says Market May Be Cooling, but Slowly
By VIKAS BAJAJ
The housing market is not slowing as fast as economists expected, according to a report yesterday, but some say the data suggest a more pronounced contraction in the next few months.
In a report that carried mixed signals, the National Association of Realtors said sales of existing homes edged up last month, the number of homes for sale rose markedly and prices increased more slowly.
Sales of existing homes, which make up about 85 percent of all homes sold, increased 0.3 percent in March, to an annual pace of 6.92 million. That was higher than the 6.9 million pace in February and the 6.57 million pace in January but lower than the 6.97 million pace in March 2005. Sales were up in the Northeast and Midwest but dropped slightly in the West and South.
Economists expected sales to fall to a pace of 6.66 million, according to a survey by Bloomberg News.
The national median selling price — half the homes sold for more and half for less — was $218,000, up 7.4 percent from a year earlier. The increase was smaller than the 9.5 percent gain in February and the 11.7 percent increase in January.
The number of homes on the market rose 7 percent, to 3.2 million. At the current sales pace, that amounts to a 5.8-month supply, up from 5.5 months in February and four months in March 2005. Economists say the rising number of homes on the market makes it harder for sellers to demand higher prices, as buyers take advantage of greater choice and their increased bargaining power.
"The bidding fever that was present a year or so ago has all but disappeared, and that's another sign that this market is slowing," said Anthony Chan, chief economist at J. P. Morgan's private client services group.
Starting late last year, buyers and sellers of homes, particularly in the East and West Coast markets, appeared to be staring each other down. Many buyers, sensing a slowdown coming, said they were holding out for a better deal, while sellers, believing they still controlled the market, refused to cut their prices.
The increase in sales in February and March indicate that the standoff is easing as sellers cut asking prices to lure buyers, economists said.
Real estate speculators in particular were affected, said David Lereah, chief economist for the Realtors. In many Florida and California cities, he said, investors who bought condominiums and other property in a bid to make a quick profit are scrambling to unload them as interest rates rise. The average rate for a 30-year fixed mortgage was 6.32 percent in March, up from 6.25 percent in February. "They are all leaving at once, particularly in Miami and Naples and some of the California markets," he said.
Mr. Lereah said the small sales increases in the last two months were temporary. "Interest rates have gone up and we will see sales come down a little more," he said.
Separately, the Conference Board said that consumer confidence rose to its highest level since May 2002 as Americans felt more optimistic about the job market. The index registered 109.6 this month, up from 107.5 in March.
posted by Jones Lang LaSalle NJ News Blog at 11:32 AM
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