Sales of single-family homes, condos fall to pre-2000 levels

Sales of existing single-family houses, condominiums, co-ops and townhouses fell last month to the lowest level in at least eight years, according to a report by the National Association of Realtors.
The seasonally adjusted rate of existing-home sales in October was 4.97 million units per year, a decrease of 1.2 percent from September’s revised level of 5.03 million and 20.7 percent from the September 2006 pace of 6.27 million units per year.
The October rate – the lowest since the NAR began maintaining its records in 1999 – lagged expectations. Analysts had expected purchases would fall 0.8 percent to an October rate of 5 million per year, based on the median forecast from a Bloomberg News survey of 70 economists.
“As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated,” Lawrence Yun, the NAR’s chief economist, said in a statement last week. “We continue to see the biggest impact in high-cost markets that rely on jumbo loans.”
But, he added, “Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases. A trend away from subprime mortgages to FHA loans, which often carry much lower interest rates, is a positive development for consumers and the housing market going forward.
“Still, it will take some time for the change to yield a measurably higher closed sales volume in the aftermath of the subprime collapse,” Yun said. “In the near term, we expect home sales to remain fairly stable.”
Last month’s results were mixed, the association noted, with sales of single-family homes holding steady at the September rate of 4.37 million units per year, or 20.8 percent below the October 2008 level, while condo sales declined. Sales of existing condos and co-op units fell 9.1 percent from their September level to a rate of 600,000 units per year, or 20.2 percent below their level a year ago.
The housing inventory nationwide rose to 4.45 million existing homes for sale at the end of October, a 1.9 percent increase from the end-of-September level. At the current sales pace, that represents a 10.8-month supply, up from September’s 10.4-month supply.
The median price of existing homes sold nationwide in October was $207,800, a decrease of 5.1 percent compared with October 2006. Among single-family homes sold last month, the median price was $205,700, or 6.3 percent below the year-ago median. For existing condos sold last month, the median price was $223,500, or 4.9 percent above the year-ago price.
“Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data,” said association President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “Broadly speaking, home prices in most areas are up modestly or fairly stable.”
Christopher Low, chief economist at FTN Financial in New York, had a different view. “Inventories are helping put tremendous downward pressure on prices,” Low told Bloomberg News. “I expect we’re going to see a pretty significant slowdown in consumer spending in the first half of next year.”
In the Northeast, total existing-home sales last month were unchanged from the September pace of 900,000 per year, or 12.6 percent from their October 2006 level. The median price edged up to $258,700, 1.3 percent higher than a year ago.
Sales also were steady last month in the South, but fell in the West and Midwest. Prices in all three regions declined from their year-ago levels. •
With reports from Bloomberg News
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