October's financial turmoil hit the Philadelphia area's existing-home market hard, as the agreements of sale signed in the eight counties fell 19.9 percent from September and 32 percent from October 2007.
"September and October's poor economic news combined with the normally slower fall real estate season create a logjam in pending sales activity," Steve Storti, senior vice president of Prudential Fox Roach Inc., said today. "Until the credit market unfreezes, regional real estate will be slow."
Potential local home buyers who were seeking bargain prices continued to stay on the sidelines because the Philadelphia market has not experienced the big declines other regions have seen, industry data showed.
For example, the most recent home-price index - First American CoreLogic's September survey - shows Philadelphia-area prices fell just 2.45 percent year-over-year, while the decline was 11.2 percent nationally and 29.9 percent in California.
Nationally, the drop in agreements of sales - that is, pending home sales - was minimal. But that was attributed to the large number of foreclosure sales in the West and Florida. Those sales also led to the drop in home prices nationally.
The Pending Home Sales Index, released today based on contracts signed in October, slipped 0.7 percent to 88.9 from 89.5 in September, and is just about 1 percent below October 2007, when it was 89.8, the National Association of Realtors said. The index is based on a 2001 level of 100.
The pending-sales index for the Northeast in October was 68.1, 14.1 percent below the same month in 2007. By comparison, the pending index in the West was 103.7, 17.4 percent higher than 2007.
Agreements of sale signed during a month typically go to closing 30 to 90 days later.
"Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range," said Lawrence Yun, the NAR's chief economist, of the national numbers.
Dale Lippart, who buys and rehabs houses for sale in Delaware County, has had one house on the market since July in Ridley Township for $249,900 and few offers.
But another of her houses, in Rutledge, was on the market for just six days in November and sold for the asking price of $315,000 with a $4,000 seller assist.
"It's a crazy market," Lippart said.
And tough, too. The National Association of Homebuilders said today that market conditions were forcing it to cut its 2009 operating budget by $11.5 million and its staff by 52 people.