Existing-home sales up 8.8% from a year ago

Existing-home sales slipped 0.9 percent in February from January but were 8.8 percent higher than the same month in 2011, the National Association of Realtors reported Wednesday.

February sales, while lower than January, were at the second-highest level in 21 months, economists said.

Sales of used houses also declined month-to-month in the eight-county Philadelphia region - 3.8 percent - but were 8.5 percent higher than in February 2011, according to the Prudential Fox & Roach HomExpert Report.

Nationally, the median home price was $156,600, up 0.3 percent from February 2011, the Realtors' group said. In the Philadelphia region, the median sales price was $182,250, down 4 percent from last year, HomExpert reported.

The national prices were up from a 10-year low, economists said.

Economists Patrick Newport and Michelle Valverde of IHS Global Insight in Lexington, Mass., said the recent increase in sales was only "slightly encouraging, since it has mainly been coming from investors, not from those wanting to live in a home they own."

That widely shared view of the housing market probably led Realtors' chief economist Lawrence Yun to say Wednesday that "there will be rising demand for both rental space and homeownership this year."

The Realtors' numbers show that one-third of sales in February were all-cash, a sign that investors - accounting for 23 percent of the total monthly sales - are heavily involved in the existing-home market.

In addition, foreclosures and short sales selling at deep discounts accounted for 34 percent of February sales nationally, keeping any year-over-year median price gains small.

Newport and Valverde said a critical question is whether sales are set to take off soon, given the improving economy.

"Our view is that sales will continue to improve, but unless credit conditions loosen significantly, a takeoff will not take place," they said.

Realtors said that cancellations of contracts - the result of appraisals coming in lower than anticipated or declined loan applications - are contributing to an uneven sales pattern.

In February, 31 percent of Realtors reported contract cancellations, compared with 33 percent in January and 9 percent in February 2011.

Nationally, total housing inventory at the end of February rose 4.3 percent to 2.43 million existing homes available for sale, a 6.4-month supply at the current sales pace.

The number of homes for sale in the eight-county region were 7.1 percent below February 2011 and 2.6 percent higher than January.

Newport and Valverde predict that existing-home sales will be about 10 percent higher in 2012 than in 2011.

Contact Alan J. Heavens at 215-854-2472, aheavens@phillynews.com or@alheavens at Twitter.