Home Prices Fell at Record Pace in October
Wednesday, November 29, 2006
U.S. existing home prices dropped a record 3.5 percent last month, compared with the same month a year earlier, while the total number of residences sold fell 11.5 percent compared with October 2005, according to an industry report released yesterday.
Nationwide, the median price of a single-family home, condominium or cooperative apartment dropped to $221,000 last month from $229,000 in October 2005, according to a report by the National Association of Realtors, a trade group representing U.S. real estate agents. The median is the point at which half the homes sell for more and half for less.
The largest drop in sales prices -- 7 percent, or double the national average -- came in the South, which includes the Washington area.
In a rare piece of good news for the beleaguered U.S. real estate industry, however, sales of existing homes rose 0.5 percent from September to a seasonally adjusted annual rate of 6.24 million in October, the first monthly increase since February, the report said.
Pat Vredevoogd Combs, president of the Realtors' group, attributed the October uptick in sales volume to "sellers cutting their price enough to encourage sales."
By region, home sales rose 6.4 percent in the West; were flat in the Midwest; fell 2.9 percent in the Northeast; and declined 1.2 percent in the South, according to the trade group's report.
David Lereah, the group's chief economist, predicted a sales rebound during the first three months of next year.
"The demographics of our growing population, historically low and declining mortgage interest rates, and healthy job creation mean the wherewithal is there to buy homes in most of the country, but many buyers remain on the sidelines," Lereah said in a statement. "After a period of price adjustment, we'll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007."
Lereah also predicted home-sale prices will experience "modest appreciation" in the early spring.
Other reports have noted some variation in sales volume and prices around the region. Prices have dipped more in Northern Virginia and the District than in much of Maryland.
While median home prices rose 6.7 percent in Prince George's County, 1.95 percent in Anne Arundel County and 0.70 percent in Montgomery County over the past year, they fell 6.4 percent in Northern Virginia, 11.8 percent in the District and 10.8 percent in Loudoun County, according to the Metropolitan Regional Information Systems, the region's multiple listing service.