Saturday, October 11, 2008

Home sales continue to slide

Home sales continued to slide in September, but the number of homes on the market also fell, in a potential sign that sellers are pulling away from the cooling market.

The number of residential properties sold in September dropped nearly 20 percent from a year ago, extending a two-year downturn in closings.

The inventory of listings also dropped from the end of August to the end of September, with the biggest decline coming in single-family homes. At the end of the month, 1,400 fewer detached homes were on the market than a year ago, a decline of more than 2 percent.

"I think what we're going to see is a decline in inventory through the end of the year," said Richard Exton, principal appraiser at Manier and Exton. "I think most people are going to be sitting on the fence to see what's going to happen."

Overall, 2,075 single-family homes, condos, multifamily buildings, farms and lots were sold in September, according to the Greater Nashville Association of Realtors.

That was the fewest closings for the month since 1998. But the decline was less sharp in single-family homes, which make up more than 80 percent of the real estate market. Sales of single-family homes dropped about 13 percent, to 1,761 closings.

The slower pace of sales appeared to push down prices.

The median price of a single-family home was $169,900, a 7 percent drop from a year ago. The median price of a condo was $148,500, down 9 percent from last September.

It was unclear what sort of impact turmoil in the financial markets has had on sales.

Analysts predict the credit squeeze on banks will trickle down to consumers in the form of tighter restrictions on mortgage lending. But the worst of the financial crisis has happened since the September sales period ended.

Christie Wilson, managing broker of Wilson Group Real Estate Services, said she had seen no impact from tighter credit.

"Zero of my buyers have had any difficulty getting a loan," Wilson said.

One impact of plummeting stock prices and the fear of lending may be to make buyers and sellers more wary, especially if they have the choice of delaying a deal.

Inventory is up

Already, some sellers appear to be pulling back.

Overall, inventory was up some from last September, mainly because of an increase in vacant lots, farms and other parcels for sale. But compared to August, the 24,270 listings at the end of the month fell 3 percent, a reversal led mainly by the sharp drop in the number of single-family houses on the market.

"Nobody's wanting to act with a 600-point decline in the stock market combined with a credit freeze," Exton said.

Nashville home sales slide 32 percent
Existing-home sales rise in July