NAR: Resale sales and prices still declining

The Nat'l Association of Realtors has released their latest numbers for January 2008, and it's more of the same: falling sales (hitting a nine-year low), declining median prices (down 4.6% from a year ago) and rising inventory (hitting 10.3 months, or about double what is typical in a normal market). From the New York Times:

Sales of previously owned homes fell for the sixth consecutive month, dropping 0.4 percent, to an annual rate of 4.89 million, the National Association of Realtors said on Monday. While the decline was less than forecast, the sales pace is the slowest since the survey began nearly a decade ago. The median home price dipped to $201,100, down 4.6 percent from a year ago.

At the current sales rate, it would take 10.3 months to sell off the current inventory of unsold homes. “That’s enormous,” said Joshua Shapiro, an economist at the research firm MFR. “That’s double the normal amount and well above where we were a year ago.”...

Weak demand is likely to put more pressure on home owners to lower their asking price, extending one of the worst slumps in the history of the housing industry. The median price of an American single-family home fell in 2007 for the first time in at least four decades, and sales of those homes dipped 13 percent last year, the biggest annual decline in a quarter-century.

Sales of single-family homes actually ticked up in January, but the rise was offset by a plunge in sales of condominiums and apartments. Median prices fell in both categories...

Still, there were a few positive points in the report. Economists had predicted a steeper drop-off in sales, and purchasing figures were revised up for the last five months. The December sales estimate was raised to a 4.91 million annual rate.

The Northeast had the steepest declines in January, with sales falling 3.6 percent. Sales dropped 2.1 percent in the West and 0.5 percent in the South, but rose by 3.4 percent in the Midwest.

As usual, the NAR tried to put a positive spin on the numbers (after all, they ARE a trade group):

Lawrence Yun, chief economist for the Realtors, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.

"Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales," he said.

He said he expected demand to be bolstered in coming months by the action of Congress in the economic stimulus bill to raise the caps on the size of loans that can be backed by Fannie Mae and Freddie Mac and the Federal Housing Administration.