Existing home sales fell again to another record low in April.
The National Association of Realtors (NAR) reports that “Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate of 4.89 million units in April from an upwardly revised pace of 4.94 million in March, and are 17.5 percent below the 5.93 million-unit level in April 2007.”
The figures represent another record low since NAR has began keeping records in 1999.
The biggest decline was in sales of apartments and condominiums, which plunged 5.2 percent after two months of rising sales.
Demand for single-family homes dropped 0.5 percent in April.
NAR also reported that the national median existing-home price for all housing types was $202,300 in April, an 8.0 percent fall from April 2007 when the median price was $219,900.
Perhaps the worst news is that the inventory of homes for sale has continued to rise and is now at its highest level in more than 20 years.
Inventory rose 10.5 percent to 4.55 million existing homes available for sale, an 11.2-month supply. With so many homes on the market, it is likely that prices will continue to decline. And with foreclosures continuing to flood the real estate market, it is expected that price declines will continue for at least several more months.
In addition, continued home price declines are keeping homebuyers, as well as investors, out of the market, as they expect even cheaper home prices in the near future.
In other words, despite (and, to a large extent, because of) sharply declining prices, supply continues to rise while demand continues to fall.
Not a pretty picture for real estate.
As is usually the case, some regions fared better than others:
April sales dropped 6 percent in the Midwest and 4.4 percent in the Northeast, but rose 6.4 percent in the West (see our post on rising home sales in Orange County, California).
Sales stayed steady in the South.
Median prices fell across all regions.
In the West, the median price was $285,700, 16.7 percent lower than April 2007. In the South, the median price was $170,800, down 5.1 percent from a year ago. The median price in the Northeast was $262,000, 7.7 percent below April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.
NAR points the finger at the mortgage industry, blaming “restrictive lending practices” for the decline in sales, the lower home prices and the increasing inventory.
Always the optimist, NAR chief economist Lawrance Yun said that recent changes in lending would help homebuyers. “I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”
We’re not holding our breath.