Home sales continue to cool, dipping to a seasonally adjusted annual rate of 5.08 million in February RealtyTrac said today. This was a -0.2 percent change from January and marked the fourth consecutive month where sales have fallen on a month-over-month basis. Sales in February 2014 still managed to remain 7 percent higher than in the same period in 2013.
Easing sales were noted nationwide. Thirty-one states posted monthly decreases and six states saw sales drop from a year earlier as did 21 of the 50 largest metro markets.
"Supply and demand have reached a bit of a standoff in this uneven real estate recovery," said Daren Blomquist, vice president at RealtyTrac. "The supply of distressed properties - which buyers and investors have come to rely on over the past few years - is evaporating quickly in most markets, but that dwindling supply is not being adequately replenished by non-distressed homeowners listing their homes or by new homes being built. Meanwhile, a key source of demand over the past two years - institutional investors purchasing single family homes as rentals - is starting to decline, and it's not yet clear if that diminishing demand will be filled by first-time homebuyers and move-up buyers."
Distressed properties still account for significant portions of real estate sales according to the RealtyTrac figures. Of sales in February 5.7 percent were classified as short sales - sales of homes pre-foreclosure with the bank taking less in payment than the value of the loan - and sales of bank owned homes (REO) for another 11.2 percent. The combined share of distressed sales - 16.9 percent - was an increase from 16.1 percent in January but down from 19.1 percent in February 2013.
The national median sales price of U.S. residential properties, including both distressed and non-distressed sales, was $164,667 in February, down 1 percent from the previous month but up 4 percent from February 2013. February marked the 20th consecutive month where the U.S. median price increased or stayed flat annually, but it was the second consecutive month with a monthly decrease. The median price of distressed properties was $96,606 in February, 44 percent below the median price of non-distressed properties: $172,339.
Sales at the public foreclosure auction accounted for1.5 percent of national sales, up from 1.3 percent in January and 1.1 percent in February 2013. RealtyTrac said that 97 percent of at-auction sales were all cash and 35 percent of the properties were sold to institutional investors, i.e. entities that had purchased 10 or more properties in a calendar year. Those institutional investors accounted for 5.9 percent of all residential sales in February, compared to 5.0 percent in January and 7.2 percent a year earlier. February was the third consecutive month where the institutional investor share of sales declined on a year-over-year basis after 19 consecutive months of year-over-year increases.
All-cash sales continue in significant numbers as well; 43.3 percent of all U.S. residential sales in February were cash compared to 42.1 percent in January and 20.2 percent in February 2013. February was the eighth consecutive month where cash sales accounted for 35 percent or more of all sales nationwide
