The latest statistics on the state of the housing market show continued signs of weakness: Americans are paying less for previously owned homes than they were a year ago and the number of such homes sold continues to fall.
The National Association of Realtors reported today that the average price of a previously owned home fell to $220,000 in September, down 2.2 percent from September 2005. At the same time, the pace of home sales slowed to a seasonally adjusted annual rate of 6.2 million, down 1.9 percent from August. That is the slowest pace since January 2004.
Sales fell even further when compared with September 2005. In the past year, existing home sales slid 14.2 percent, the realtors association said.
The new sales numbers suggest a housing market that is downshifting, but it remains unclear just how much further sales and prices will fall. Market experts are divided over whether housing is just beginning a deep and lengthy correction, or merely leveling off after several years of explosive growth.
The association said the latest statistics indicate that the market is starting to stabilize, but many economists said it is far too early to say that the worst has passed.
The association said that the inventory unsold homes on the market declined to 3.8 million in September from 3.9 million in August, a sign that it found encouraging.
“We may have hit a trough, or soon will be reaching one,” said Lawrence Yun, senior economist at the association. “It’s just a matter of buyers’ confidence. And once they see the bottom hit, buyers will feel more confident about entering the market.”
The September report was the second in a row to show falling prices. The previous report in August was the first in more than a decade to record a year-over-year decline in the median price of an existing home.
Despite a small decline in inventories last month, the number of homes for sale remains near historic highs. Many economists believe that with such a large surplus of homes unsold, prices are likely to weaken for some time. At September’s pace, it would take 7.3 months to sell all the existing homes now on the market, the association said.
“A year ago, this ratio was 4.6 months,” said Joshua Shapiro, chief United States economist with MFR, a consulting firm. “And the sharp rise over the spring and summer suggests that pricing will weaken further in the months ahead.”
Peter Schiff, president of Euro Pacific Capital in Darien, Conn., said that predictions about the market bottoming out were premature. “The fall has just begun,” he said. “We’re still up in the stratosphere now.”
The data showed that selling a condominium in September was more difficult than selling a single-family home. Condo sales fell by 3.2 percent from August, and inventories rose to an 8.6-month supply. By contrast, single-family home sales fell 1.6 percent while inventories rose to 7.1 months.
Overall existing home sales and prices fell the fastest in the Northeast, by 3.7 percent from August, and median prices there slipped 5.1 percent from a year earlier, to $259,000. In the West, sales volume fell 3.1 percent from August, and prices dropped 4.3 percent from a year earlier, to $332,000. In the Midwest sales decreased 2.8 percent from August; prices dropped 2.3 percent from last year, to $208,000.
The South was the only region where sales picked up, rising 0.4 percent in September. Prices there, however, were 1.6 percent lower than a year ago.
