Total existing-home sales-including single-family, townhomes, condominiums, and co-ops-dropped 1.2 percent, and prices posted a record slump in October according to a report released Wednesday morning by the National Association of Realtors (NAR). One of the more telling statistics of October's report is that sales slipped under the 5 million mark for the first time since the report began in January 1999.
The report also revealed that single-family sales were flat, while condo/co-op sales plunged 9.1 percent and October's supply of existing single-family homes rose from 10.2 to 10.5 months, its highest reading since July 1985. In addition, the median price of a home sold last month declined to $207,800, a drop of 5.1 percent year-over-year, the biggest annual price decline on record. Metro areas that are showing healthy price gains included Charlotte, N.C.; San Francisco; Albuquerque, N.M.; and Green Bay, Wis.
According to a statement released by the NAR, "Lingering effects of the credit crunch were a drag on sales but the mortgage situation has improved significantly."
"As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated," said Lawrence Yun, NAR chief economist. "We continue to see the biggest impact in high-cost markets that rely on jumbo loans. Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases. "
According to Patrick Newport, an economist with Global Insight, a Massachusetts-based economic and financial analysis firm, October's drop "may be a sign that the credit [crunch's] tightening impact on home sales is easing."
Regionally, existing-home sales in the Northeast were unchanged at an annual pace of 900,000 in October, 12.6 percent below October 2006. The median price in the region was $258,700, up 1.3 percent from a year ago.
Like the Northeast, existing-home sales in the South were unchanged in October, posting an annual rate of 2.03 million. But sales are 19.4 percent below a year ago. The median price was $171,400, down 6.7 percent from October 2006.
In the Midwest, existing-home sales slid 1.7 percent to an annual rate of 1.18 million, which is 16.9 percent below October 2006. The Midwest's median price was $164,000, down 1.6 percent from a year ago.
The biggest drop was in the West, where existing-home sales fell 4.4 percent in to a level of 870,000, and are 33.1 percent below a year ago. The median price in the West was $318,200, which is 6.9 percent lower than October 2006.
Carl Reichardt, a Wachovia Capital Markets senior equity research analyst, said in a note that he believes "existing-home sellers will be less likely to capitulate on price as compared to new builders if economic strength and/or job growth somehow continues."