February Existing Home Sales Rise While Home Prices Tank

As reported my CNNMoney.com - "Existing home sales spike 5%":

Sales of existing homes unexpectedly rose in February, recovering from a sharp drop in the previous month, according to an industry report released Monday.

The National Association of Realtors said that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million million units, up 5.1% from a rate of 4.49 million in January. February sales were down nearly 5% from year ago levels.

Who's buying?

The report said first-time buyers made up half of all purchases in February, and that sales of distressed properties accounted for about 45% of all transactions.

Where the sales were HOT?

Sales were unexpectedly strong in the West, with activity increasing more than 30% over last year.

Median home price drops:

The national median existing-home price was $165,400 in February, down 15.5% from last year, when the median price was $195,800.

Inventory levels:

Meanwhile, the total number of existing homes on the market at the end of February rose 5.2% to 3.80 million units. At the current sales pace, it would take an estimated 9.7 months to sell down that inventory of properties.

The report also said the total number of homes for sale has steadily declined over the past six months from a record level last July.

Falling home prices have been translating into increased sales activity and trending lower inventory levels. Couple that with 4-5% interest rates and home buyer credits .... bargains and good deals abound.