February existing home sales rise by 5.1%

Prices are expected to keep falling well into the year.

By Alan Zibel
ASSOCIATED PRESS
Tuesday, March 24, 2009

WASHINGTON - One month does not a recovery make, but a jump in existing home sales in February may be a sign that the real estate market is stabilizing.

Although sales of existing homes remain at lows not seen in more than a decade, economists were encouraged by the news, saying it reflected buyers who were taking advantage of deep discounts on foreclosures and other distressed properties. That activity is essential if home prices are to hit bottom.

Prices plunged by almost 16 percent from a year ago in February and are expected to keep falling this year. Tens of thousands of homes remain tied up in the foreclosure process and are not yet for sale.

In addition, as the recession deepens and job losses mount, many buyers may decide to stay on the sidelines.

"The four-letter word in the housing market is 'jobs,' " said Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies. "If you're worried about having a job tomorrow, you're not likely to buy a home now."

Sheryl Morgan, a real estate agent in Canonsburg, Pa., about 20 miles south of Pittsburgh, recently lost two potential clients after local employers cut back on pay.

"Instead of selling and buying a new home, they're staying and refinancing," she said.

The National Association of Realtors said Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January.

Read the rest of the stroy here at http://www.statesman.com/business/content/business/stories/other/03/24/0324homesales.html

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