Print

Email story

Comment

Letter to the editor

Home sales, prices tumble

The slump, the worst seen in 16 years, is predicted to worsen.

Sales of existing homes dropped for a fifth straight month in July while the number of unsold homes shot up to a record level.

Many analysts said the worst slump in housing in 16 years is likely to deepen in coming months, reflecting the recent turmoil in credit markets, which has led lenders to tighten their standards.

The National Association of Realtors reported Monday that sales of existing homes dipped by 0.2 percent in July compared with June to a seasonally adjusted annual rate of 5.75-million units.

The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined, a record stretch.

In the Tampa Bay area, single-family home sales in July slid 28 percent year to year, to 2,068 from 2,871. The percentage decline wasn't as steep as in the winter and spring, when sales were off about 40 percent from a year earlier. Prices dipped 7 percent, from $232,200 to $215,600.

Condos sales in the Tampa-St. Petersburg-Clearwater were down only slightly from July 2006 to July 2007, falling to 543 from 569. Median prices for condos rose a bit to $172,100 from $167,700.

The housing slump, combined with recent severe turmoil in financial markets, has raised worries about a possible recession. But many economists believe the Federal Reserve will ward off a full-blown downturn by reducing a key short-term interest rate should financial market conditions fail to stabilize.

But economists said the report on existing home sales signaled further trouble ahead, given a big jump in the inventory of unsold homes, which rose by 5.1 percent to a record level of 4.59-million homes.

Based on the July sales pace, it would take 9.2 months to exhaust the single-family homes on the market, the highest level in nearly 16 years, and 11.9 months to exhaust the level of condominiums on the market. The months' supply of condos sitting on the market is 45.1 percent higher than a year ago.

The rising glut of unsold homes is putting downward pressure on prices. The median price of an existing home, the point where half of homes sold for more and half for less, has now fallen every month for a year, something that has not occurred before on Realtors' records going to 1969. Economists said to expect more price declines in coming months.

"We are literally swimming in an ocean of homes for sale," said Mike Larson, a real estate analyst with Weiss Research Inc. "Until we work through this extremely large inventory glut, we're not going to see any momentum in home prices."

Analysts said the financial market turbulence that has occurred this month will mean further downward pressure on home sales as big investors such as hedge funds grow more leery about purchasing mortgages that have been packaged into securities for fear that the rising number of defaults will mean they won't get repaid.

Times staff writer James Thorner contributed to this report. Read more about area housing news online at (Un)Real Estate at blogs.tampabay.com/realestate/

Bay area housing: July vs. year ago

Single-family existing homes:

- Sales down 28 percent

- Median sales price down 7 percent

Existing condos:

- Sales down 5 percent

- Median sales price up 3 percent

Source: Florida Association of Realtors

[Last modified August 27, 2007, 23:45:59]