Homes sales dip; prices fall sharply

Realtors' group says April sales by homeowners declined by 1%, while inventory jumped 10% and home prices tumbled another 8%.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: May 23, 2008: 12:01 PM EDT

NEW YORK (CNNMoney.com) -- Sales of existing homes slowed in April while inventory soared, according to a reading of the sagging housing market released Friday.

The National Association of Realtors reported that sales by homeowners dipped in April to an annual pace of 4.89 million, down 1% from the revised March reading of 4.94 million.

The existing home sales rate - including single-family, townhomes, condominiums and co-ops - is 17.5% below the 5.93 million units sold in April 2007.

The 4.89 million sales figure came in slightly ahead of the 4.85 million estimate forecast by economists surveyed by Briefing.com.

The median price of a home sold during the month fell to $202,300, down 8% from $219,900 a year ago. Prices are being pushed down by the growing number of existing homes on the market.

Homes available for sale at the end of April rose 10.5% to 4.55 million, which represents an 11.2-month supply at the current sales pace, up from a 10.0-month supply in March.

"This was the latest in the long string of disappointing results," said Mike Larson, real estate analyst for Weiss Research. He said he expected "relatively disappointing numbers for the next couple months."

What a difference a few years make

Larson put the April existing sales number of 4.89 million in context: in September 2005, the annualized pace was 7.2 million units. That means the current rate is more than 30% down from the peak - the housing market is not booming.

Before the start of the current housing slump, it had been 11 years since prices had fallen compared to a year earlier.

"Some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results," said Lawrence Yun, NAR chief economist in a report.

Larson also said that in some markets, bargain hunters are starting to nibble where prices are down nearly 50% from their peak. "But what the national averages are telling us is that we have not reached that tipping point for the nation as a whole," he said.

Single-family home sales slipped 0.5% to a seasonally adjusted annual rate of 4.34 million in April, which is 16.1% below the 5.17 million-unit level from one year ago.

The median existing single-family home price was $200,700 in April, down 8.5% from April 2007.

Regionally, existing home sales in the West actually rose 6.4% in April from March to a level of 1 million, propping up the national average. However, while sales in the West were up, they are still 15.3% below a year ago. The median price in the West was $285,700, which is 16.7% lower than April 2007.

Sales in the Northeast fell 4.4% to an annual pace of 870,000 in April, 14.7% below a year ago. The median price in the Northeast was $262,000, which is 7.7% below April 2007.

In the Midwest, existing home sales were at an annual rate of 1.1 million in April, which is 6.0% below March and 19.7% lower than April 2007. The median price in the Midwest was $159,100, down 2.9% from April 2007.