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Real Estate News in Big Bear Lake, California

Sales in December, January and February were revised higher. In February, sales were revised to a 324,000 annualized pace, up from 308,000. It's still the lowest on record, dating to 1963.

Homes for sale are up and homes that sold are up 24% compared with March 2009, but are down 70% from the peak in 2005.

Government statisticians have low confidence in the monthly report, which is subject to large revisions, and large sampling and other statistical errors.

In most months, the government isn't sure whether sales rose or fell. The standard error in March, for instance, was plus or minus 21.1%. Read the full government report.

The government says it can take up to five months to establish a statistically significant trend in sales. Over the past five months, sales have been on a 358,000 seasonally adjusted annual pace, up from 355,000 in the five-month interval through February and 356,000 in March 2009. It's the first time since January 2006 that the five-month average was higher than a year earlier.

Sales of new homes had fallen four months in a row before March's surprising boom. A federal tax credit for home buyers that expires soon seemed to have little impact on sales until March.

In order to qualify for the credit, a buyer must sign a sales contract before April 30, and must close before June 30. New-home sales are recorded at the time of the contract signing, not the closing, so April's sales figures would be the last to show any impact from the subsidy.

"We expect a further sharp rise in April sales then a sharp, though temporary, drop in May," wrote Ian Shepherdson, chief domestic economist for High Frequency Economics. "After that, much depends on whether Congress extends the tax break; we expect it will."

On Thursday, the National Association of Realtors said sales of existing homes rose 6.8% in March. Existing-home sales are recorded at the time of closing. See full story on existing-home sales.

Housing, which led the economy into recession, seems to be the last sector to recover. Earlier this month, Federal Reserve Chairman Ben Bernanke said, "We have yet to see evidence of a sustained recovery in the housing market."

Policy makers and investors will be watching the housing data closely over the next few months to see if the market can continue March's gains even after the tax credit expires and federal support for low mortgage rates subsides.

"We think that the second quarter will be a make-or-break quarter for the housing sector," wrote Ward McCarthy, chief financial economist for Jefferies Economics. "Our current view is that the housing sector is in the process of stabilizing on a national level. Recovery will be a slow and fitful process."

Fundamentally, housing starts are too low to meet the demand caused by household formation, noted Tony Crescenzi, strategist for Pimco. Ahead of the recession, about 1.2 million households were formed each year. Not all of those families will buy homes, but all of them need shelter. Many of them have been doubling up during the recession.

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Inventories of unsold homes fell by 5,000, or 2.1%, to 228,000, the lowest in 39 years. At the March sales pace, it would take 6.7 months to sell off the inventory. That's the lowest months' inventory since December 2006.

Home builders have been slashing their inventory of unsold homes for more than a year. The number of homes for sale that are under construction fell to a record low of 100,000.

Builders have cut back on production of new homes, but they still face headwinds from unsold existing-homes as foreclosures continue to mount up.

If a home isn't sold before it's finished, it's taking a record 14.4 months to sell it after completion -- a reflection of the mismatch between more expensively priced homes in the inventory and lower-priced homes that have been selling.

The median sales price of a new home sold in March was $214,000, up 4.3% compared with a year earlier. Cheaper homes were selling better than expensive ones. Just 12% of homes sold for more than $400,000.

Sales were up in all four regions: up 36% in the Northeast, up 4% in the Midwest, up 44% in the South and up 6% in the West, the government's data showed. Big Bear Lake home sales are up slightly in 2010 partly due to the increase in short sales and foreclosures from bank owned properties in Southern California.