Philadelphia-area existing-home sales fell 31.4 percent in January compared with the same month in 2008, continuing the market downturn.

There were 990 fewer existing houses sold - 2,160 in January compared with 3,150 in January 2008.

Median prices also declined - 6.4 percent year-over-year in the eight-county region, said the Prudential Fox & Roach HomExpert Report, using data from Trend Multiple Listing Service.

"January activity was more of a holding pattern," Prudential Fox & Roach senior vice president Steve Storti said. "With the [federal economic] stimulus out of the way and a number of home-buyer tax incentives, we're optimistic."

The price drop - to $195,000 from $208,000 a year earlier - was modest by comparison with 25 percent to 35 percent and higher declines in the foreclosure-choked markets of the West, Florida, and the Midwest. This is seen as an indication that sellers here are getting their expectations in line with market realities.

"I think that a lot of sellers finally recognize that they aren't going to be getting the price their neighbors got last year," said John Duffy, owner of Duffy Real Estate on the Main Line.

The National Association of Realtors said yesterday that sales of existing homes, at the national level, fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million units in December. It was the weakest showing since July 1997 and well below the slight rise in sales that economists had expected.

Part of the drag on home sales "has been a lack of mortgage money, part has been the fear of buying a depreciating asset, and part has been the rumors that there would be 4 percent mortgages from the government," said Joel L. Naroff, chief economist at TD Bank N.A., of Cherry Hill.

"It looks like more mortgage money is slowly becoming available, and, hopefully, people are no longer expecting the government to subsidize everyone who wants to buy a home," Naroff said.

Data from the Office of Federal Housing Enterprise Oversight, which tracks home prices nationally, put year-over-year, fourth-quarter decline at just 1.72 percent for the eight-county region. Over the last five years, the area's average price has increased 38.74 percent, the report shows.

The oversight office's fourth-quarter report showed prices down 8.2 percent nationally year-over-year.

Contact real estate writer Alan J. Heavens at 215-854-2472 or
This article contains information from the Associated Press.