Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for February showing a continued break in the epic government sponsored surge in home sales activity with single family home sales declining 1.4% since last month but still remaining 4.3% above the level seen last year.
As for prices, the February release showed a 2.1% decline on a year-over-year basis as well as resulting in now 40 consecutive year-over-year declines.
It’s important when reflecting on the sales results to consider that over 72.3% of all sales were for properties priced below $250,000 while just over 7.3% were priced at or above $500,000.
Clearly, today’s results unequivocally indicate that the government’s tax gimmick drove a surge in "lemming style" demand into the fall of 2009, bringing a renewal of speculative animal spirits, but with an effect that appears to have been largely temporary.
Realtor's are expecting a second great surge of "buying" activity as we near the second tax gimmick expiration this spring but as today's results suggest, these tricks are likely creating very little additional demand and simply shift demand forward as "buyers" jump for the government tax carrot... a carrot likely dangled over an abyss of asset price deflation.
The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.