Existing homes sales fall 2.6 percent

WASHINGTON — Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.

The National Association of Realtors reported Friday that sales of existing homes dropped by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.

The median price of a home fell to $220,900, an 0.8 percent decline from the median price a year ago. The median is the point where half the homes sold for more and half for less.

In Jackson County, the latest year-over-year figures for existing homes showed a decline for the Feb. 1-April 30 period: 431 sales were recorded in 2007, a 6.7 percent drop from the 462 homes sold during the same time in 2006.

The median price for existing homes countywide dropped 7.2 percent during the two-month period, from $277,000 in February-April 2006 to $257,200 this year.

The slide in existing home sales nationwide came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.

Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.

"It is only a matter of time before homeowners realize that the dream is over and that price cuts are now necessary to sell their homes," said Peter Schiff, president of Euro Pacific Capital, a Darien, Conn., investment firm.

The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply. Analysts predicted that this big inventory surge would act to further depress prices.

"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.

"Unrealistic sellers, stuck flippers, stretched borrowers, foreclosures. They're all contributing to a surge in homes on the market," Larson said. Flippers are investors who bought homes during the boom hoping to resell them for a quick profit only to be caught as the market softened.

On Wall Street, the Dow Jones industrial average rose 66.15 points to close at 13,507.28 in a quiet trading session ahead of the long Memorial Day weekend. The Dow had fallen in the previous four sessions.

Housing enjoyed an extended surge in which sales of both new and existing homes set records for five straight years until 2006. The Realtors are forecasting that existing home prices could decline by around 2 percent this year, which would be the first setback for an entire year on records that go back four decades.

But Lawrence Yun, senior economist for the Realtors, noted that the expected price decline would still be modest in comparison to the 50 percent appreciation in home prices that occurred during the boom period.

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