Existing-Home Sales Take Slight Slide in November
Friday, December 30, 2005
In another sign of a cooling housing market, sales of existing homes dipped slightly in November, falling 1.7 percent compared with November 2004, according to a report released yesterday by the National Association of Realtors.
At this rate, some 6.97 million used homes will change hands in the year, still a record year for sales.
The number of homes on the market also rose, to the highest level in more than a year, the trade group reported. At this sales rate, there is now a five-month supply of unsold homes, up from January of this year, when there was a 3.8-month supply.
This is the latest report showing that the market appears to have slowed from its hyperactive pace of earlier this year. Last week, the federal government reported that in November, new-home sales fell 11.3 percent from the previous month.
David Lereah, chief economist for the Realtors group, blamed the slowdown on rising mortgage rates. Higher interest rates make homes less affordable because they make monthly payments higher.
Statistical indications of a slower market come as no surprise to Kristen Harrington, 39, a teacher who put her two-bedroom Arlington condo on the market in October. She asked what she thought was a below-market price, $399,999, but has received no offers. She withdrew the condo from the market yesterday.
She said the slowdown was painfully apparent to her because only about a half-dozen shoppers looked over the condo in the three months it was on the market. A married mother of two toddlers, Harrington has tired of trying to keep her home spotless. She is frustrated because she and her husband, an assistant manager at a gym, need a bigger home and want to move closer to their jobs.
"We never imagined it would be on the market this long," she said. "We're very discouraged."
Thomas M. Stevens, president of the National Association of Realtors and a Vienna real estate broker, said he could sympathize. His own home, a 6,400-square-foot single-family house on two acres in Great Falls, priced at $1.45 million, has been up for sale since September. He said he would give Harrington the same advice he follows himself: When the market slows, sellers need to look at their properties with steely-eyed realism, cutting the price if other homes are selling for less. He also counsels patience.
Stevens said sellers locally are in a better position than elsewhere in the nation, where home sales have fallen more steeply. In the Northeast and West, according to the Realtors group, the declines in home sales have been steeper than in the South, which includes the Washington area. In fact, in the South, sales of existing homes fell in November compared with October but increased 3.8 percent compared with November 2004, the only region in the country that saw a year-over-year increase in sales.
Housing prices nationally also seem to be moderating somewhat, according to the report. In November, the median price -- the point at which half the homes cost more and half cost less -- was $215,000, up 13.2 percent from a year earlier. In comparison, home prices rose 16.6 percent in October compared with the previous year.
Some owners are cutting prices to sell. Jeff Weeks, 33, a defense contractor, just sold his Alexandria condo after it was on the market for two months. He had been so worried about buying another home that he and his fiancee, Heather Gruver, 33, a consultant with Booz Allen Hamilton Inc., purchased a rowhouse on Capitol Hill before he sold his condo. That left him with the frightening prospect of two mortgage payments. He had rushed ahead with the rowhouse purchase because of his experience in 2003, when he was one of 43 buyers bidding on a single property.
Instead, this time, he found himself stressed as the seller.
So Weeks reduced the price of his two-bedroom Old Town condo to $300,000, down from $319,000 -- even though a similar unit sold for $345,000 some time ago. With the lower price, he soon got an offer from a woman who is a first-time buyer, he said.
"She got a really good deal," he said.