Posted on 05/25/2007 1:01:40 PM PDT by GodGunsGuts
Existing Home Sales Drop to 4-Year Low
MoneyNews Friday, May 25, 2007
WASHINGTON -- Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.
The National Association of Realtors reported Friday that sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units. That was the slowest sales pace since June 2003.
The median price of a home fell to $220,900, an 0.8 percent fall from the midpoint selling price a year ago. It marked the ninth straight decline in the median price.
Sales were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the Midwest and 0.7 percent in the South.
The drop in sales was accompanied by a big jump in the number of unsold homes left on the market. They climbed to a record total of 4.2 million. It would take 8.4 months to exhaust that supply of homes at the April sales pace.
Analysts are concerned that the glut of unsold homes will further depress prices in coming months.
But Lawrence Yun, senior economist for the Realtors, said that the small year-over-year price decline of less than 1 percent was still modest compared to the 50 percent rise in home prices that occurred during the five boom years that ended last year.
Yun said some of the weakness in April reflected a weather payback after sales had shown gains at the beginning of the year, reflecting warmer-than-normal winter weather.
He also blamed the rising troubles in the subprime mortgage market, the area of the market designed for borrowers with weaker credit histories. Rising mortgage foreclosures are causing banks and other lenders to tighten up on their lending standards while curtailing their more risky loan business.
"We've been anticipating slower home sales because many subprime loan products are no longer available," he said. "Fortunately, a wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months will help stabilize the market going forward."
He said the big rise in unsold homes on the market could be an indication that sellers are testing the market in hopes of selling their homes and moving up to larger units, which he said would be a positive early sign of a rebound in housing.
But other analysts are not as optimistic, expressing concerns that housing could remain under downward pressure for the rest of this year and stage only a modest recovery in 2008.
The troubles in housing have acted to depress overall economic activity which slowed to a growth rate of just 1.3 percent in the first three months of this year, the slowest economic growth rate in four years.
© 2007 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.
ping
Yesterday home sales soard to the biggest ever with a 16% increase but, an 11% reduction in price.
Today this headline.
What a joke.
This will cheer those younger folks who are trying to get into a house! Don't know about the rest of the nation, but in SoCal it's been a wild ride for several years.
Yesterday’s reported 16% increase on an average 11% price reduction pertained to new construction. These numbers pertain to existing homes. The two sets of statistics are reported separately. Of course, they both represent a national average, which is next to meaningless as far as residential real estate goes. There are several areas of the country that are doing quite well, most of which did not benefit from the bit price runup of the past several years. But, some of the “hot” markets are still doing OK. Most of the country is doing OK, too. What this report fails to make clear is, the average cost of homes can be strongly affected by the volume of sales in lower priced properties, or the lack of higher priced ones.
You’d think that might get a passing mention. LOL
“And the crowd goes wild....”
I believe the Realtors are faking sales statistics trying to keep the ponzi scheme going. The public are confused and helpless: "Up, down, up, down," report news agencies quoting the same source over and over again.
As it happens, I know a bit more than the average bear. I have traveled the entire west coast in the past two months, interviewing people who sold their homes.
Prices on homes are down all over the west coast between 10% and 25%. But real estate is a spotty animal. Prices on the Oregon coast went up over 100% in a few towns (e.g. Florence) last year. Sticker shock hit very hard. The odd thing about that is there are no jobs in the areas where prices went sky high. The locals were forced to flee because rents also went up. That was later year. Today prices on the Oregon coast are falling again.
Realtors are misleading the public like crazy. They are also being sued by the feds for anti-trust violations (price fixing) right now. In my personal opinion, the feds ought to be prosecuting them under RICO for ponzi scheme games.Read more here
I’m currently trying to sell one home and buy another.
The one I want to sell — it’s like “Oh, this is a bad market. You’ll have to slash your price.” And the lenders are stalling.
The one I want to buy — it’s like “Prices are remaining high. People aren’t coming down. They’s rather rent them out than sell at as lower price.”
In the real world, these are just headlines. They are not reality.
WHOA , you mean put down woodflooring, tavartine tiles, granite countertops and marking the price up another 200k wont make them sell like hotcake?
Yesterday's numbers were for NEW home sales. Sales were up, but prices were way down. Today's press release is for EXISTING homes. Overall, housing is doing poorly. I wouldn't celebrate a 16% sales gain if it were accompanied by a 11% price drop.
DAMB SKIPPY!!!
I cant wait for the market to dip a bit so the wife and I can buy! =o)
And of course your expertise is renowned.
What!!! I can't believe you're maligning such an ethical group of fine upstanding business people. I mean, look at the additions they've made to our language:
Cozy = cramped
Step saver kitchen = micro-kitchen with barely enough room for a toaster
Secluded = five miles from nearest paved road
Handyman's special = bring a wrecking ball and Dumpster
Needs 'TLC' = bring two Dumpsters
Natural setting = Hope your DR trimmer has plenty of gasoline
Peek-a-boo view of... = In winter, when the leaves are off the trees, you might be able to see the ... from the bathroom window
Near highway = Interstate noise all day and all night
Yeah, I used to work with them, too.
Yesterday's headline said that new homes selling at realistic prices sold like hotcakes.
Today's headline states that existing homes being sold by sellers who want to maintain bubble prices are not selling now that the irresponsible, gimmick loans that made those prices possible are being seen by buyers as the financial time-bombs they always were.
The bottom line is that sanity and responsibility are returning to the market.
The prices are now being determined by what the market can actually bear and not by the amount of money that the loan shark is lending the greater fool.
Yeah, I know what the NAR is saying. Notice that the reporters are very confused themselves. The NAR is feeding bovine squat to reporters who just nod their heads and take notes. Realtors love to spread confusion about housing prices. Google housing prices and you will see those stupid, misleading “Up, down, up, down” headlines. Home prices are a crock especially in California where standard sized houses may sell for $ 850,000 ++. The general public better wake up soon.
Why can’t you buy now? It is pretty easy to do.
Why pay over $ 399,000 for a three bedroom house (1911) built that costs about $ 217 per square foot? New houses are being built all over the place for less than $ 100 sf.
Yes --
and --
The new homes sales numbers were based on contracts.
Guess what?? Those folks contracting for those homes likely have resale homes to sell. I'm not holding my breath for those new home sale contracts to actually go through.
S&P downgraded homebuilders again yesterday.
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