U.S. Existing Home Sales Fell in January to 4.49 Million Rate

Feb. 25 (Bloomberg) -- By Courtney Schlisserman

HIGHLIGHTS

Issues of interest:

• National Association of Realtors: Stated purchases fell 5.3 percent to an annual rate of 4.49 million, the fewest since 1997, from 4.74 million in December. The median price dropped 15 percent from a year ago, and distressed properties accounted for 45 percent of all sales.
• Resales: Of single-family homes decreased 4.7 percent to an annual rate of 4.05 million. Sales of condos and co-ops dropped 10 percent to a 440,000 rate. Total sales were down 8.6 percent compared with a year earlier.
• Home Sales: have been falling since 2005 and prices peaked in 2006. The S&P/Case-Shiller home-price index of 20 metropolitan cities was down 18.5 percent in December from a year earlier, a record decline, the group said yesterday.
• RealtyTrac Inc: Stated home foreclosures were up 17.8 percent in January from a year earlier. A total of 274,399 properties got a default or auction notice or were seized by banks, the 10th straight month that foreclosures topped 250,000.
• Fed Chairman Ben S. Bernanke: Stated on 2/24/09 the U.S. economy is in a “severe” contraction, and warned the recession may last into 2010 unless policy makers can stabilize the financial system.

COMMENTS

Another dismal report on the housing front. Get use to it. The housing market ran for years on speculation and on unstable funding practices. It is going to take a number of years for this market to stabilize.

What's a savvy financial novice to do. Right now, my advise is to do nothing. Understand the meaning of patience and timing. Why because:

• The Federal, State, and local laws and taxes our in flux.
• Rising Unemployment.
• Continuation of falling families net worth.
• Home prices have not demonstrated a bottom.

Don't worry about missing the boat, cash is king and will continue to be so for the rest of 2009 plus.

James Monachino