Economic review for Feb. 25, 2005

Real (net of inflation) gross domestic product grew 3.8% at a seasonally adjusted annual rate in the fourth quarter, the Bureau of Economic Analysis reported today. This “preliminary” estimate was considerably higher than last month's “advance” estimate of 3.1%. Real investment in private nonresidential structures, including mines as well as construction, rose 1.2% for the quarter rather than falling 4.1% as previously estimated. In the third quarter, such investment dropped 1.1%. The price index for private nonresidential structures climbed 10.8% (previously estimated at 10.3%), up from 9.8% in the third quarter.

“Existing-home sales, revised with improved methodology, were essentially flat in January but remained at historically high levels,” the National Assn. of Realtors (NAR) reported today. “A slight decline in single-family home sales was offset by a record monthly level of condo sales, which just came off its ninth consecutive record year….Total housing inventory levels declined 5.8% at the end of January with 2.09 million existing homes available for sale, which represents a 3.7-month supply at the current sales pace-a record low.” Condominium and cooperative housing sales accounted for 12.6% of transactions in January. Existing condo sales rose 2.3% for the month and 22% from a year ago to a record seasonally adjusted annual rate of 858,000 units in January. The median condo price was $203,700, up 15% from a year ago. Single-family home resales declined 0.5% in January to a seasonally adjusted annual rate of 5.94 million units,12.5% above the pace in January 2004. The median single-family home price was $186,900 in January, up 10% from January 2004.