The real estate market that couldn't get any worse just did. The Commerce Department and the National Association of Realtors on Tuesday reported sales results for new and existing homes in November the provided fresh evidence that the recession is exacerbating the housing downturn.
Commerce said sales of new one-family houses in November fell 2.9% to a seasonally adjusted annual rate of 407,000, according to estimates by the U.S. Census Bureau and the Department of Housing and Urban Development, putting the market 35.3% behind where it was in November, 2007.Since the Commerce Department does not factor cancellations into its estimates, the real number of annual new-home sales would well under 300,000.
The Realtors reported that existing-home sales, including single-family, townhomes, condominiums and co-ops, fell 8.6% in November to a seasonally adjusted annual rate1 of 4.49 million units, 10.6% below the already depressed levels of last November. October's numbers were also revised downward to an annual rate of 4.91 million.
The median sales price of new houses sold in November 2008 was $220,400, up from $214,600 in October but well below the $249,100 posted last November.The average sales price was $287,500, also up for the month from $279,500 in October but below last November's $316,800. The seasonally adjusted estimate of new houses for sale at the end of November was 374,000, an 11.5-months supply, down marginally from 11.8 months in October. However, the number of months on the market increased to 9.3 in November from 9.1 in October, up sharply from 6 months in November, 2007.
Regionally, new-home sales were up 14.3% in the Northeast, but down 27.3% from last November; down 16.4% in the Midwest, off 34.9% from last year; down 7.1% in the South, off 38.1% from last year; and up11.0% in the West, 32.2% below a year ago.
Of the existing home market, Lawrence Yun, NAR chief economist, said, "The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level. We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001."
The national median existing-home price for all housing types was down 13.3% from last November to $181,300. The Realtors attributed part of that decline to "a significant downward distortion in the current price from a large number of distress sales at discounted prices."
Single-family existing home sales fell 8.0% to a seasonally adjusted annual rate of 4.02 million, and are 8.8% below a year ago. The median existing single-family home price was $180,800 in November, down 12.8% from November 2007.
Existing condominium and co-op sales dropped 13.0% to a seasonally adjusted annual rate of 470,000 units in November, 23.1% below November 2007. The median existing condo price was $185,400, down 15.5% from a year ago.
Regionally, existing-home sales in the Northeast dropped 12.0% to an annual pace of 730,000 in November, 18.0% lower than a year ago. The median price in the Northeast was $257,700, down 0.1% from November 2007. The Midwest fell 7.4% to a pace of 1 million, 16.0% below November 2007. The median price was $142,400, down 11.2% from a year ago. The South dropped 10.9% to an annual pace of 1.64 million in November, 17.6% below a year ago. The median price in the South was $154,500, 10.6% lower than November 2007.Sales in the West declined 4.3% to an annual rate of 1.12 million, 17.9% higher than November 2007. The median price in the West was $242,500, down 25.5% from a year ago.
The Realtors used the dismal numbers to renew their call for a housing stimulus package from the federal government. "It is...imperative to provide incentives for homebuyers to get back into the market," said Yun.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, added, ³We need more than low interest rates to encourage enough buyers to enter the market and meaningfully draw down inventory...We should extend the first-time buyer tax credit to all homebuyers and eliminate the repayment feature, and make permanent the higher loan limits that are vital in high-cost markets."