A house of cards: Existing sales fall
In fourth quarter of 2007, 45 states dealt a losing hand
By By Alan Zibel , Associated Press
Friday, February 15, 2008
Sales of existing homes fell in 45 states during the October-December quarter, with metropolitan areas showing growing weakness, a real estate trade group said Thursday.
The fourth-quarter data from the National Association of Realtors underscore the breadth of the housing market's slump.
South Dakota was the lone state to show a sales increase.
Existing-home sales there rose 8.9 percent from the same quarter a year ago. Sales were unchanged in North Dakota. No sales figures were available for Idaho, Indiana and New Hampshire. Sales also fell in Washington, D.C.
Median home prices fell in more than half the 150 metropolitan areas surveyed. Of the 77 that experienced declines, 16 showed double-digit percentage drops, the trade group said.
The largest price declines were in Lansing, Mich.; Sacramento, Calif.; Jackson, Miss.; and Riverside, Calif., which posted price declines of 17 percent to 19 percent.
Lawrence Yun, the trade group's chief economist, blamed the declines in median prices on mortgage-market problems that grew last fall, making loans more costly for borrowers looking to take out "jumbo" mortgages larger than $417,000, the maximum size of mortgages that government-sponsored mortgage firms Fannie Mae and Freddie Mac can buy and market as securities.
"The continuing crunch in the jumbo-loan market that began in August has disproportionately reduced the number of transactions in higher price ranges," Yun said in a statement.
Nationwide, existing homes sold at an annual rate of 4.96 million units in the fourth quarter, down 21 percent from the sales pace of the fourth quarter in 2006.
The states suffering the biggest drop in sales in the fourth quarter were Nevada, down 44 percent, and Wyoming, down 42 percent.
Other states with big declines were New Mexico, down 39 percent, Oregon, down 38 percent, and Arizona, down 37.6 percent.
Mortgage lenders, would-be home buyers and Wall Street investors have been grappling during the past year with the impact of rising defaults, the result of lax lending standards that were prevalent during this decade's housing boom.
Moderate decline in prices in Denver market
The Denver-area home market saw modest declines in prices and closings in the fourth quarter and for the entire year but was nowhere near as bad as many other markets across the country, independent broker Gary Bauer said Thursday.
There were 49,789 closings in 2007, down slightly from 50,244 closings in 2006.
In the fourth quarter, there were 10,549 closings in 2007, down from 10,802 in 2006 and 11,592 in 2005.
The median price of a home sold in the Denver area last year fell to $229,500 from $240,000 in 2006, a 4.4 percent drop.
Bauer said he expects a flat year in 2008 for prices and sales and predicts Denver will "be able to weather everything out there better than most parts of the country."