Depressed Job Market Causes Existing Home Sales to Drop, NAR Says Quick Lift Possible as Result of Stimulus

By Anuradha Kher, Online News EditorWashington, D.C.–Total sales of homes, including single-family and condo, fell 6.4 percent in the quarter as a result of job losses and low consumer confidence, according to the National Association of Realtors (NAR).Lawrence Yun, NAR chief economist, says the market is clearly depressed from job losses and consumer concerns about the economy. “Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he adds.“If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun says.NAR reported existing home sales were at a seasonally adjusted annual rate of 4.70 million units in the fourth quarter, down from 5.02 million units in the third quarter. This figure is 5.9 percent below the 5 million-unit pace in the fourth quarter of 2007. In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $186,000 in the fourth quarter, down 15.8 percent from the fourth quarter of 2007. Eight metros showed annual increases in the median condo price and 48 areas had declines.According to NAR’s estimates a homebuyer tax credit of $8,000 for first time buyers could bring 300,000 people into the market. A credit of 15,000 for all buyers would bring an additional 1 million buyers into the fold.“Roughly two thirds of the buyers right now are first-time homebuyers,”  Walter Maloney, spokesperson for NAR, tells MHN. “This makes sense because they are the ones who do not have to worry about selling their existing homes.” The strongest condo price increases were in the Dallas-Fort Worth-Arlington area at $149,500, up 14.1 percent, followed by Toledo, where the median condo price of $153,900 rose 11.4 percent from the fourth quarter of 2007, and the Philadelphia-Camden-Wilmington area at $210,200, up 10.2 percent. Metro area median existing-condo prices in the fourth quarter ranged from $88,500 in the Palm Bay-Melbourne-Titusville area of Florida to $391,900 in San Francisco-Oakland-Fremont. The second most expensive condo market reported was Honolulu at $315,600, followed by the New York-Wayne-White Plains area of New York and New Jersey at $292,600. Other affordable condo markets include Las Vegas-Paradise at $91,200 in the fourth quarter, and the Sacramento–Arden-Arcade-Roseville area at $94,700.“Once again, we see a pattern of strong sales gains, particularly in lower price homes, in areas with price declines resulting from foreclosures,” Yun says. “For example, in California and Florida, where distressed sales accounted for roughly two-third of all sales, the median price fell by much more as lower priced home sales far outpaced higher priced sales.”