Home sales, prices plunge in September

Delaware market even slower than nationalBy MARTIN CRUTSINGER, Associated Press
Posted Thursday, October 25, 2007Read Comments-->10/25/2007 -->
WASHINGTON -- Sales of existing homes plunged by a record amount in September while median home prices dropped by the largest amount in nearly a year, reflecting deepening problems in the housing market.
Analysts said the current downturn is already more severe than the housing slump of the 1990s and they predicted before it is resolved it will rival the 1980-82 housing slump, when the industry was battered by double-digit mortgage rates and a steep economic downturn.
The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.
The median price -- the point at which half the homes sold for more and half for less -- fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It was the biggest price drop since last October and marked the 13th time out of the past 14 months that the year-over-year sales price has decreased.
Delaware experienced deeper declines. In New Castle County, 498 homes were sold in September, down 15 percent from the same month last year. Through the first nine months of the year, 5,962 homes were sold in the county, down 9.6 percent from the first nine months of 2006.
Kent County fared even worse. Just 141 homes were sold in September, down 22.1 percent from the 181 homes sold in September 2006. And through the first nine months of the year, there were 1,416 homes sold in Kent County, a 17.5 percent drop from the same period last year, according to Trend multiple listing service.
Meanwhile, the median settled sales price of homes in New Castle County in September was $245,000, up 8.5 percent from the $226,000 figure a year ago. Kent County saw a slight decrease, with a median price of $225,000 this September, compared with $235,000 the same month last year.
Problems in housing worsened in September following a severe credit crunch that hit in August as banks and other lenders tightened standards in the face of soaring mortgage defaults. The market all but dried up for subprime borrowers, those with weak credit histories, and people seeking so-called jumbo loans over $417,000.
Many economists said the problems in housing could well last for another year, given record-high levels of unsold new and existing homes.
"The housing market is unraveling," said Mark Zandi, chief economist at Moody's Economy.com. "We are in a steep downturn and the prospects are that it is going to get worse before it gets better."