Home sales fall to record low

TRAVERSE CITY -- Pending U.S. home sales fell to the lowest level on record in November, as the plummeting stock market and faltering economy gave more buyers cold feet, said the National Association of Realtors.

The monthly index, released Tuesday, tracks signed contracts to purchase existing homes and fell 4 percent to 82.3 from a downwardly revised October reading of 85.7 in October. That was far worse than the reading of 88 that economists expected, according to Thomson Reuters.

Locally, November home sales in the five-county area dropped by around 24 percent compared to November 2007, according to sales data from the Traverse Area Association of Realtors. There were a total of 110 single-family home sales in Grand Traverse, Leelanau, Benzie, Antrim and Kalkaska counties in November, compared to 145 properties sold in November 2007.

The sales values of those properties totaled just over $20 million, a decline of almost 44 percent from the November 2007 total of almost $36 million.

Local properties also spent more time on the market. Homes sold in the 5-county area spent an average of 196 days up for sale according to TAAR, almost a month longer than the 169-day average from a year earlier. The median or midpoint sales price also dipped to $136,250, compared to $169,900 in November 2007.

Nationally, sales contracts fell around the country but were weakest in the Northeast and Midwest. The Realtors' index was down 5.3 percent from November 2007, and now sits at the lowest in its eight-year history -- beating the previous record low of 83 in March 2008.

An index reading of 100 is equal to the average level of sales activity in 2001, when the index started.

Typically there is a one- to two-month lag between a contract and a done deal. So November's decline foreshadows bleak results for December's existing home sales numbers, set for release Jan. 26.

U.S. existing home sales plunged to a rate of 4.49 million in November, down 8.6 percent from October. When the final tally for 2008 is complete, it is likely to be the worst year for home sales in at least a decade. Plus, with job losses mounting, there appears to be no quick turnaround this year.

TAAR's sales figures for 2008 totaled around 1,800 properties in the five-county area, the lowest volume in at least five years.

Lobbyists for the real estate industry are using the deteriorating housing market data to call on President-elect Barack Obama to devote attention to sinking home prices and sales -- the genesis of the recession.

"A real estate-focused stimulus plan is urgently needed," Lawrence Yun, the trade group's chief economist, said in a statement.

Home sales are growing in foreclosure-plagued areas like Las Vegas and Los Angeles, but they are still sinking in most of the country. The Realtors group estimates that 45 percent of existing home sales are now foreclosures and other distressed properties. Yun, however, forecasts a modest increase in home sales for 2009. He projects sales will be up 6.6 percent, after plunging by around 13 percent in both 2007 and 2008. Prices are forecast to remain relatively level with a median of $198,100 this year, up from $197,000 last year.

Photos

A lot map at a luxury homes subdivision in Tigard, Ore. AP file photo