Existing Home Sales Sag in Third Quarter
Monday, November 20, 2006; 1:24 PM
More good news for home buyers today.
Sales of existing homes fell in 38 states over the summer, with steep declines in the once sizzling states of Florida, California, Nevada and Arizona as the national housing market showed yet more signs of cooling off.
The National Association of Realtors, the country's trade association for real estate agents, reported that national sales of existing homes, both single-family homes and condominiums, sagged 12.7 percent in the third quarter compared to the same period last year. Sales were down to a seasonally adjusted annual rate of 6.27 million units, the NAR reported.
Nine states had sales declines of 20 percent or more over the summer with the biggest declines in states that were once the hottest. Sales fell by 38 percent in Nevada; 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California. Sales rose in 10 states and in two states -- New Hampshire and Vermont -- the association did not have available data.
Not surprisingly, the weakness in sales translated to price declines -- 45 metropolitan areas in the country experienced price declines, including the Washington area, according to a separate survey also released today by the agents' association.
The NAR's price survey showed that the median -- or mid-point -- price of an existing home sold over the summer was $224,900, a dip of 1.2 percent compared to last year.
In the Washington area, the median price for an existing single-family home declined 2.2 percent in the third quarter of the year compared to the third quarter of 2005. This summer, the median price for a Washington area single-family home was $431,900 compared to $441,400 last summer, still far above the national average.
David Lereah, the NAR's chief economist, described market conditions as almost a complete flip-flop from last year.
"Last year, we had a record sales market and historically tight supplies of homes with buyers bidding over the asking price," Lereah said in an NAR release. "With the market in full transition, buyers now have choices and sellers are more willing to negotiate. Under these circumstances it's no surprise that overall home prices are slightly below a year ago."
Lereah said the NAR expects "this trend to continue in the months ahead, but we'll see modest appreciation in most of the country in 2007."
NAR President Pat Vredevoogd Combs said the market change is good news for home buyers. "With the supply of homes at the highest level in over a decade and historically low mortgage interest rates, it's become a great time to buy a home," she said.
She warned, however, that the good times might not last that long.
"This window of opportunity will continue into the new year, but inventories are starting to decline and sellers will be less willing to negotiate when conditions begin to balance in most areas around early spring."