Vol. XXI, No. 187 [ Business World Online ]
Thursday, April 24, 2008 | MANILA, PHILIPPINES
WASHINGTON — Sales of existing US homes slid further in March, an industry group reported yesterday in a report underscoring the extended slump in the US housing market.
A sale sign sits in front of a home in the Shaker Heights section of Cleveland, Ohio on Jan. 25. Sales of existing US homes fell by 2% in March, an industry group reported yesterday in a report underscoring the extended slump in the US housing market. The National Association of Realtors said the annualized sales pace was 4.93 million, weaker than the 4.95 million expected by Wall Street economists. Sales resumed their decline after a slight uptick in February. — AFP
The report showed a monthly drop of 2% and 19.3% yearly plunge in existing home sales, the largest segment of the housing market.
The National Association of Realtors said the annualized sales pace was 4.93 million, weaker than the 4.95 million expected by Wall Street economists. Sales resumed their decline after a slight uptick in February.
This reflects a meltdown in the property market after years of sizzling growth and a speculative bubble. The boom and bust has slammed the entire economy and led to rising foreclosures and massive losses for banks.
The median existing home price for all housing types was $200,700 in March, down by 7.7% from a year ago.
The association said existing home sales have been uneven with the steepest declines in high-cost areas, providing "a downward pull to the national median" price.
Lawrence Yun, NAR chief economist, said the problems in the banking sector are also affecting the market.
"Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," he said. "At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines," he added.
In another sign of the troubles for housing, inventory rose by 1% at the end of March to 4.06 million existing homes. That represented a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.
Single-family home sales fell by 2.7% for the month. The median existing single-family home price was $198,200 in March, down by 8.3% from a year ago.
Existing condominium and co-op apartment sales rose by 3.6% for the month but were 25.5% below the level a year ago. The median existing price for this segment was 2.8% lower than March 2007.
Marie-Pierre Ripert, an economist at Ixis Corporate and Investment Bank, said the glut of homes "suggests that the downward correction in the housing market is not over."
Economist Sal Guatieri at BMO Capital Markets agreed. "There is still little evidence of stabilization in US housing markets, though the recent pace of decline in sales has slowed," he said.
"House prices should keep falling until the massive glut of unsold homes is absorbed by rising demand. Sales will eventually benefit from improved affordability, but the near-term picture remains clouded by ongoing job losses and more discriminating lenders," he said.
Robert Brusca at FAO Economics said the true picture is hard to determine because some homeowners may be waiting for a recovery to put their properties up for sale. "So the housing mess drags on, but remember that with existing homes it’s hard to gauge where we stand since not all these sellers are likely to be committed sellers," he said. — AFP
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