Condo, Co-op Sales Drop 23% from Year Ago, Prices Fall 15%
- Dec 23, 2008
By Anuradha Kher, Online News EditorWashington, D.C.–Existing-home sales weakened against a backdrop of an eroding economy, according to the National Association of Realtors (NAR). Existing condominium and co-op sales dropped 13.0 percent to a seasonally adjusted annual rate of 470,000 units in November from 540,000 units in October, and are 23.1 percent lower than the 611,000-unit pace in November 2007. The median existing condo price was $185,400 in November, down 15.5 percent from a year ago. “When people were making housing decisions that are being reflected in this study, the economy declined and rate of unemployment went up,” Jed Smith, managing director of quantitative research for NAR, tells MHN. “There is a strong co-relation between this weakening of home sales and the downturn in the mortgage market.”Regionally, existing-home sales in the Northeast dropped 12.0 percent to an annual pace of 730,000 in November, and are 18.0 percent lower than a year ago. The median price in the Northeast was $257,700, down 0.1percent from November 2007. Existing-home sales in the Midwest fell 7.4 percent in November to a pace of 1.00 million and are 16.0 percent below November 2007. The median price in the Midwest was $142,400, down 11.2 percent from a year ago. In the South, existing-home sales dropped 10.9 percent to an annual pace of 1.64 million in November, and are 17.6 percent below a year ago. The median price in the South was $154,500, which is 10.6 percent lower than November 2007. Existing-home sales in the West declined 4.3 percent to an annual rate of 1.12 million in November but are 17.9 percent higher than November 2007. The median price in the West was $242,500, down 25.5 percent from a year ago. “The recovery for homes sales will begin in 2009. Even now, we see some loans coming back,” says Smith referring to the under 5 percent loans. “After the holiday, season, we expect to see some activity in the sales market—both multifamily as well as single-family.”According to Smith, the loss of jobs will no doubt continue to have an impact on homes sales but he points out that there are still a lot of people who have jobs and will be looking to buy when the prices are low. “In addition, mortgage rates are historically low when compared to the last 10 years, which makes it a good time to get a loan,” says Smith.Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 8.6 percent to a seasonally adjusted annual rate1 of 4.49 million units in November from a downwardly revised level of 4.91 million in October, and are 10.6 percent below the 5.02 million-unit pace in November 2007.