Philadelphia area home-price slump eases in November

Philadelphia-area existing-home sales registered the lowest year-over-year monthly decline in November, but were almost half the number sold during the 2006 boom.

November sales of 2,827 used homes in the eight counties were just 8.9 percent below 3,104 sold in the same month in 2007, but were 46.4 percent off the 5,272 that changed hands in 2006, according to Prudential Fox & Roach HomExpert Report, using data from Trend Multiple Listing Service.

By comparison, October sales were 19.9 percent lower than the same month in 2007; September's were down 11 percent; August's down 29.2 percent; and July's were off 22.6 percent.

Median prices were down just 2.3 percent over November 2007, to $210,000 from $214,900, and just 3.4 percent from the same month in 2006 - $217,380.

"Median sale prices leveled off, while inventory dropped some," said Prudential Fox & Roach senior vice president Steve Storti. "With interest rates continuing to fall [they are 5 percent for a 30-year fixed mortgage], this combination is good news for buyers and sellers."

Nationally, existing-home sales were down 10.2 percent from November 2007, and they would have fallen much more without the continued massive sell-off of distressed properties in the West and in Florida, according to the National Association of Realtors.

And sales of new homes fell in November to the slowest pace in nearly 18 years. The Commerce Department reported that new-home sales fell 2.9 percent to a seasonally adjusted annual sales pace of 407,000 units. That was a weaker performance than economists had expected and was the slowest sales pace since January 1991.

The median price of a new home sold in November was $220,400, a drop of 11.5 percent from the sales price a year ago. That was the biggest year-over-year price decline since a 12.7 percent fall in March of this year. The median is the point where half the homes sold for more and half for less.

The annual sales pace of 407,000 new homes was even weaker than the 420,000 expected by private economists. In addition, the government revised the October performance sharply lower to a sales rate of 419,000 units, instead of the 433,000 sales previously reported.

"Demand has fallen so far that developers are now listing the names of the people who buy homes rather than the number of homes sold," quipped Joel Naroff, TD Bank N.A. chief economist.

When it comes to existing homes, "sales are rising only in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices," said Lawrence Yun, NAR chief economist.

"The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level," Yun said. "We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001."

The volume of foreclosure sales in California, Nevada, Arizona and Florida brought the national median sale price down 13.2 percent from November 2007, to $181,300 from $208,800.

In a separate report, First American CoreLogic's latest Home Price Index, for October, showed year-over-year price declines for the Philadelphia region at just 2.52 percent, compared with a 10.4 percent drop nationally. California had all of the 10 worst-performing markets in the country, with Riverside, Orange and San Bernardino Counties, an area of 11 million people, showing the worst year-over-year drop of 28.79 percent.

First American's chief economist, Mark Fleming, said he expected price declines to moderate in 2009, given a surge in FHA lending, "which typically has a lower than average sale price."

Despite the modest median price drop, Philadelphia-area sellers appear unenthusiastic about putting their houses on the market. A survey released today by Prudential Fox & Roach of 38,000 subscribers to its Web site's home-search tool found that, of the nearly 1,600 responses, fewer than 2 percent said it was a good time to sell.

Sixty-six percent of respondents said that it was a good time to buy a home; 4 percent believe that real estate is a bad investment right now; and nearly 52 percent of buyers and sellers said they believed that the region was doing better than the national market, while 4 percent said they believed it was worse. The survey was completed in early December.