Housing numbers build bleak picture
WASHINGTON -- Hit by a severe credit crunch, existing home sales fell for the eighth straight month with median home prices dropping by a record amount.
The National Association of Realtors reported Wednesday sales of existing homes dropped by 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units. That represented the slowest sales pace on record going back to 1999 and was 20.7 percent below activity a year ago.
The median price of a home sold last month, the point where half the homes sold for more and half for less, declined to $207,800, a drop of 5.1 percent from a year ago, the biggest year-over-year price decline on record.
In Illinois, the median home sale price statewide dropped slightly, but in the Chicago area the median sale price increased 3.1 percent compared to a year ago, according to the Illinois Association of Realtors.
The Chicago area median home sale price in October was $250,000, up from $242,500 in October 2006. Statewide, the median sale price was $195,000 for the month, down 1.5 percent from $198,000 a year ago.
Statewide there were 10,043 total home sales, which includes single-family homes and condominiums, in October, down 23.1 percent from October 2006, which had 13,067 sales, the state association said. Year-to-date sales were down 16.1 percent to 122,394 homes sold January through October 2007, compared to 145,851 homes sold during the same period last year.
Comparing month-to-month, sales were down 4.1 percent in October from September, when 10,476 homes sold.
In the Chicago area, home sales totaled 6,558 in October, down 27.2 percent from 9,007 home sales in the same month last year. Year-to-date, sales were down 19.3 percent to 81,852 homes sold January through October compared to 101,414 homes sold during the same period last year.
Nationally, the October weakness was blamed on the fallout from a credit crunch that roiled financial markets in August. Banks and other lenders have tightened credit standards in response to a soaring level of defaults, especially on subprime mortgages.
Analysts predicted prices will have to drop further in order to work down historic levels of unsold homes and the slump in housing, already the most severe in more than two decades, could last for another year.
"The light at the end of the housing meltdown tunnel appears to be an oncoming train," Joel Naroff, an economist with Naroff Economic Advisors, said in response to the new figures. "With so many choices and so few buyers, the median price is cratering."
Wall Street, however, took the latest bad news on housing in stride, preferring to focus instead on comments from Federal Reserve Vice Chairman Donald Kohn that were interpreted as offering the hope of further Fed rate cuts.