March 24th, 2009 by Michael Oliver

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Existing home sales came in at a higher then expected number across the nation. Existing home sales increased 5.1% in February a lot of this can probably be due to incredibly high affordability in almost all areas and the stimulus plan that brought additional buyers into the market. For the first time in a long while real estate reports are starting to show trends that are not in line with the past 3 year downturn. A couple weeks ago New Home Starts surprised everyone by being up 22% over previous year numbers. Now with Existing Home sales notching the largest sales increase since July 2003, it could mean a baseline bottom is starting (or has begun) to form. Now with only one increase on the books there still needs to be (in my mind) at least 3-6 straight months of sales increases to justify the real estate markets have turned around. For the time being these stats are showing strength in what was thought to be a still weakening housing market. Also keep in mind all real estate is very local sometimes even down to the street you live on. The Tucson Arizona real estate market seems to be making a turn around but whether it has truly hit bottom or not is hard to say. I do see a lot of buyers are in the market right now probably more today then anytime in the past 6 months. Time will tell if this is the bottom of the market or just a slight blimp. Here is the entire report from cnbc.com about existing home sales for those who would like additional info. (along with a video)

Sales of previously owned U.S. homes rose at their fastest pace in nearly six years in February, data showed on Monday, providing some good news for the recession hit-economy.

Sales rose 5.1 percent in February to a 4.72 million-unit annual rate, notching their largest gain since July 2003, the National Association of Realtors said, but about 45 percent of the sales were foreclosure or short-sale transactions.

Economists polled by Reuters were expecting home resales to slip to a 4.45 million-unit pace, from the 4.49 million rate initially reported for January.

“Our analysis shows that distressed homes typically are selling for 20 percent less than normal market price, and this naturally is drawing down the median price,” said Lawrence Yun, NAR chief economist.

The median national home price declined 15.5 percent from a year ago to $165,400, the second biggest decline on record.

“Lower prices coupled with very low interest rates and an $8,000 tax credit are causing first-time home buyers to dive in,” said Bill Emerson, chief executive officer of Quicken Loans in Livonia, Michigan.

“While it’s good to see sales go up, it’s more important to see inventories go down. When that happens, only then can you start to talk about a housing correction,” he said.

The inventory of existing homes for sale rose 5.2 percent to 3.80 million from the 3.61 million overstock reported in January. That represented a 9.7 month supply at the current sales pace, unchanged from January.

The housing market is at the core of the economic and financial meltdown that has triggered a collapse in asset prices, severely damaging household wealth. Stability in the housing market is seen as a key ingredient for the economy’s recovery from a recession that started in December 2007.

The housing data added to the optimism sparked earlier by the unveiling of a U.S. government plan to relieve banks of money-losing assets to revive the recession-hit economy.

The Dow Jones industrial average was up over 2 while the Standard & Poor’s 500 Index and the Nasdaq Composite Index were up over 3 percent.