February home sales slowed in February, while prices increased by double digits over last year. The RE/MAX National Housing Report, a survey of MLS data in 52 metropolitan areas, found the February results to be nearly identical to January.  Just like January, the median home price rose 11.6% compared to the same month in 2013, and is now at $180,450. Home sales dropped by 8.8%, compared to January's year-to-year loss of 7.1%. Unusually harsh winter storms impacted appraisals, inspections and closings. Even though inventory losses have been shrinking, low inventories in many metro areas had a negative impact on sales. Even at the rate of February sales, the corresponding Months Supply of inventory of 5.1 isn't significantly below the 6.0 level of a market balanced between buyers and sellers. When measured on a year-to-year basis, February became the 11th consecutive month with fewer inventory losses than the previous month.

"A combination of severe weather and low inventories appears to have slowed February home sales. The improving economy, increasing new-home construction and significant pent-up demand should all be critical factors as we move into the traditionally stronger sales months of spring and summer. Sales during these months will determine the overall picture for 2014," said Margaret Kelly, RE/MAX CEO.  

Transactions – Year-Over-Year Change

In the 52 metro areas surveyed for the February report, home sales were down an average of 8.8% from February last year and remained roughly equivalent to January sales with just a 0.8% drop.  February becomes only the third month in the last 32 months to experience a year-to-year sales decline. Although winter months normally record the lowest home sales of the year, unusually harsh weather disrupted numerous home sales in February. Of all 52 metro areas surveyed, 42 saw year-to-year sales decrease. Due to low inventories, many metros that saw the highest price increases also saw the largest drop in sales from last year including: Las Vegas, NV -22.0%, Detroit, MI -18.3%, Orlando, FL -15.9%, San Diego, CA -15.0% and San Francisco, CA -14.3%

Median Sales Price 

The February RE/MAX National Housing Report found a Median Sales Price of $180,450, which was 4.3% higher than the Median Sales Price in January and 11.6% higher than the price seen in February last year. On a year-to-year basis, the Median Sales Price has now increased for 25 consecutive months. Low inventory has placed significant pressure on home prices throughout this period. 

Among the 52 metro areas surveyed, 44 reported higher sales prices than one year ago. Of those, 18 reported double-digit increases including: Detroit, MI +35.8%, San Francisco, CA +25.0%, Las Vegas, NV +24.1%, Atlanta, GA +20.3%,Los Angeles, CA +19.3% and Orlando, FL +17.4%.

Days on Market – Average of 52 Metro Areas

For all homes sold in February, the average Days on Market was 80, which was 5 days more than the average in January, but 9 days less than the average in February 2013. February marks the 21st consecutive month with an average Days on Market below 90. The low Days on Market average is associated with continued high demand and a reduced inventory of homes for sale. Days on Market is the number of days between when a home is first listed in an MLS and when a sales contract is signed. 

Months Supply of Inventory – Average of 52 Metro Areas

The national real estate market continues to be characterized by a low supply of homes for sale. However, year-to-year inventory losses continue to shrink. The inventory of homes for sale in February was just 2.4% less than January and 9.8% less than last February, when the year-to-year inventory loss was 29.2%. At the current rate of sales, there is a 5.1 Months Supply of inventory. Metros with a very low Months Supply include: Denver, CO 0.8, San Francisco, CA 1.3, Los Angeles, CA 2.5, San Diego, CA 2.5, Houston, TX 2.6, Boston, MA 2.7 and Washington, DC 2.7. A supply of 6.0 is considered balanced.