Huntsville real estate foreclosures| Huntsville Alabama foreclosed homes

Home sales in U.S. fall 8% for September New house deals drop 27.5% for area
Thursday, October 25, 2007
From staff and wire reports WASHINGTON - Sales of existing homes across the nation dropped in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.

The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent, 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 slowdown pinched prices. 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 a year ago.

The 8 percent decline in sales was bigger than the 4.5 percent decline that had been expected.

While the Birmingham area had seen only modest declines this year, the number of housing transactions fell 15 percent in September, the biggest monthly decline in 2007.

The figure from the Birmingham Association of Realtors includes new home sales, which fell 27.5 percent last month, more steeply than the overall rate.

Jim Lawrence of LAH Real Estate, the association's president, said last week "a cooling off of the market had to happen" after years of record-breaking sales.

In the Birmingham area, sales prices climbed last month, with a median price of $164,200, up from $159,000 in September 2006.

Statewide, existing home sales fell 11.5 percent in September, according to Grayson Glaze, executive director of the Alabama Center for Real Estate at the University of Alabama.

Analysts explaining the U.S. decline blamed the bigger-than-expected slump on the turmoil that hit credit markets and mortgage markets in August as worries increased over rising mortgage foreclosures.

"Mortgage problems were peaking back in August when many of the September closings were being negotiated and that slowed sales notably in higher-priced areas that rely more on jumbo loans," said Lawrence Yun, senior economist for the Realtors.

The slowdown meant the inventory of unsold homes across the nation rose to 4.4 million units in September. At the September sales pace, it would 10.5 months to eliminate the overhang of unsold homes, a record length of time.

Economists fret that the levels of unsold existing and new homes will put further downward pressure on prices.

As Alabama's housing market enters the final quarter of the year, UA's Glaze said inventory will be a concern. At the current rate of sales, the state has a 10.4-month supply of homes, up nearly 37 percent from the 7.6-month supply in September 2006.

"The primary question is whether new construction will be curtailed in sufficient amounts to assist in reducing the oversupply of inventory, whether realistic sellers when pricing will take into account the current levels of inventory and the unknown impact of foreclosures as adjustable-rate mortgages continue to reset in the coming months ahead," Glaze said.

Yun said that the price declines should be put into perspective in that they are occurring after a five-year housing boom which pushed prices up to record levels.

He forecast that prices will decline by about 1.5 percent this year. That would be the first annual price decline on Realtors' records going back four decades

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