Existing home sales last month see increase in West and across nation
By ALEX VEIGA
Heavy discounting on foreclosed homes and low interest rates continued to power a home-buying spree across the West in September, sending sales of existing homes in the region soaring at an annual pace reminiscent of the days of the housing boom, according to two reports Friday.
About 100,000 existing homes and condos were sold last month in the 13-state region. Without adjusting for seasonal factors, sales were up nearly 43 percent from the same month last year, but declined 9.6 percent versus August's total, according to the National Association of Realtors.
With sharply discounted foreclosures making up a larger slice of overall sales, the median price in the West plunged almost 19 percent from a year ago to $253,600 — slightly higher than what the median was five years ago, the association said.
Nationally, existing home sales rose 7.8 percent from September 2007, but declined 9.6 percent from August last year, on an unadjusted basis. The U.S. median price tumbled 9 percent to $191,600. Sales of single family houses, townhouses, condominiums and cooperatives rose 5.5 percent in September from the previous month to a seasonally adjusted annual rate of 5.18 million units, the highest level in a year, according to the National Association of Realtors. They were up 1.4 percent from the same time a year ago — the first time since November 2005 that home sales have been above year-ago levels.
In the West, where foreclosures have been particularly pronounced, the region led the nation in terms of sales pace and median home price declines.
Las Vegas, Los Angeles, Phoenix and San Diego posted the sharpest spike in home sales last month, according to the Associated Press-Re/Max Monthly Housing Report, released Friday. The data includes all home sales recorded in the metro area by all local agents, regardless of company affiliation.
Los Angeles, San Francisco, San Diego and Phoenix were among the top five metros to post the steepest median price decline in the U.S., with Detroit second overall behind Los Angeles.
The year-over-year surge in sales might appear like the makings of a turnaround, but housing experts are quick to downplay that scenario.
For one, they note the easy comparison to September 2007's sales, which were dismal in the wake of the credit crunch that started just months before, drying up lending for all but traditional conforming loans at $417,000 or below.
In California alone, that caused some 30 percent of real estate contracts to fall through, according to the National Association of Realtors.
As the financial crisis has spread and deepened in recent weeks, it also has cast doubt on a budding housing recovery.
"We're headed toward a very serious recession, maybe one of the worst ones since at least the '80s, and when people lose their jobs, when there isn't job growth, people don't move around, so homes don't sell as much," said Patrick Newport economist at IHS Global Insight. "These numbers are for September, so they don't reflect what happened in October, when the market really started to freeze up."
In general, a healthy housing market is defined as one where all kinds of homes are selling, not just bargain-basement foreclosed properties, Newport added.
Such concerns weren't in play for buyers in Las Vegas, who drove sales up by 163 percent compared to a year ago, according to the AP-Re/Max report.
The median price of a single-family home in Las Vegas fell almost 32 percent from a year ago to $195,000. It declined 7.1 percent from August's median, according to the AP-Re/Max report.
Outside of the Southwest, sales also rose in metro areas, including Denver, Salt Lake City and Boise, Idaho.
Sales tumbled, meanwhile, in other areas, including Seattle, Honolulu, Portland and Billings, Mont.