Existing Home Sales Pace Hits Record Low in October
Existing home sales fell 1.2 percent to a record low of of 4.97 million unit-pace in October, according to a report from the National Association of Realtors that underscores how difficult the current housing market has become. In addition to sales volume, median existing-home prices fell 5.1 percent on a yearly basis to $207,800, the largest such percentage drop in prices since the realtor-led association began tracking complete housing market data in 1999. It's worth noting that the NAR revised its September sales estimate downward to a 5.03 million pace from a previously-reporeted 5.04 million -- the trade association has now downwardly revised every existing home sales estimate for each reported month in 2007, meaning that today's 4.97 million sales pace for October is likely to be adjusted downward next month as well. The NAR characterized the sharp decline in national prices as "a downward distortion from the temporary problems with jumbo loans that slowed sales in high-price markets, and that dragged down the national median." NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that the price drop wan't what it seemed to be. â€œKeep 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," he said. "Broadly speaking, home prices in most areas are up modestly or fairly stable." The group did not comment on how it defined prices as being "up" or "stable," and also did not comment on pricing trends. Most house price indices have shown very clearly that the vast majority of metro housing markets in the U.S. are trending negatively on a monthly basis, even if yearly price comparisons don't yet register an outright decline. (See HW's recent coverage of the S&P/Case-Shiller indices). In addition to declining sales and dropping prices, the supply of existing homes on the market continues to increase. Total housing inventory rose 1.9 percent at the end of October to 4.45 million existing homes available for sale, the NAR said, which represents a 10.8-month supply at the current sales pace, up from a downwardly revised 10.4-month supply in September. For more information, visit http://www.realtor.org.