Consumer Hesitation Drives Home Sales Decline: Report
Existing-home sales fell 3.1 percent to 4.98 million units in October, seasonally adjusted, from 5.14 million in September, coming in at 1.6 percent below the 5.06 million-unit level in October 2007. Housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, according to a report released Monday by the National Association of Realtors. Consumer hesitation and uncertainty in the face of economic concerns drove the declines, which is understandable, according to NAR economist Lawrence Yun. “Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” Yun said. “We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.” The national median existing home price for all housing types was $183,300 in October, down 11.3 percent from a year ago when the median was $206,700, according to the NAR's press statement regarding the report. The slip in home price was affected by "a large number of distress sales at discounted prices." Regionally, existing-home sales in the Northeast slipped 1.2 percent to an annual pace of 830,000 in October; they eased by 1.6 percent to 1.21 million annually in the West, the NAR reported. In the South, existing-home sales declined 3.2 percent to an annual pace of 1.84 million in October and fell 6.0 percent to 1.10 million annually in the Midwest. NAR president Charles McMillan, a broker with Dallas-based Coldwell Banker Residential Brokerage, said the need for professional assistance is growing. “Navigating the transaction process is easier said than done without professional assistance in today’s market,” McMillan said. “Proper valuation when many homes are being sold below replacement construction costs is very challenging -- buyers remain in the driver’s seat.” See a summary of the report. Write to Diana Golobay at email@example.com.