From Chronicle-Tribune staff and wire reports
WASHINGTON - Sales of new homes in the United States fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued.
Grant County housing sales have dipped some, but the area has seen slower shrinkage than the national average, according to the local Realtors president.
Local market slightly weaker
Richard Nichols, president of the Grant County Association of Realtors, said 120 houses were sold by Realtors between Jan. 1 and March 25.
That number is down from 135 houses in 2007 and from 154 in 2006.
"The numbers have slipped a little bit, but they're not in the toilet," Nichols said. "Realtors still sold 120 properties in a three-month period. Things are a little slow, but they're still moving."
The sharp spike in foreclosures has widely been blamed for the national housing slump, but the average number of the sold houses that were repossessions has remained quite constant.
Nichols said 48 of the 120 houses sold so far in 2008 were from repossessions. That's a 40 percent average.
Compare that to the 54 sales out of 135 in 2007, and the average remains identical.
The 60 repossession sales from the 154 deals in the same period in 2006 make up about 39 percent
All that means the change in the number of repossessed houses being sold in Grant County has remained virtually constant during the last two years.
Nichols believes the current market is win-win.
"I think it's a good time for buyers," he said. "I also think it's a good time for sellers, because we have more buyers. We're holding our own in this market."
Times have been tough for some sellers.
Kirk Smith owns a home in the Sunnycrest area of Marion. He has had his house on the market for about two months but hasn't seen any offers he likes. He is trying to sell the home without using a real estate agent.
"The market's not so great," he said. "I would just as soon sell it. But it's tough."
Smith, who has owned the home for 23 years, said he and his family are moving because they had a great opportunity to buy a home in a more wooded area. Unlike some other homeowners, he said he is not under tremendous strain to sell the property because someone has expressed interest in renting it from him.
"I don't really want to have to be a landlord," he said.
Smith had his home independently appraised, but based on prices in his neighborhood, he doesn't expect to receive an offer within $10,000 of what he was told his home is worth.
"I'm going to have a hard time getting a return of it in this market," he said.
National market takes a hit
The Commerce Department reported Wednesday that new home sales dropped 1.8 percent last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected.
The median price of a home sold last month dropped to $244,100, down 2.7 percent from the level of a year ago.
The prolonged slump in housing has dragged down overall economic activity. Many analysts believe the slump could combine with a multitude of other problems including a severe credit crunch, soaring energy prices and plunging consumer confidence, to push the country into a full-blown recession.
Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent, but posted gains in the South of 5.7 percent and 0.7 percent in the West.
Many analysts believe that the slump in housing, which began in 2006, could last into 2009. It was reported Tuesday that the Standard & Poor's/Case-Shiller index of home prices fell nearly 11 percent in January from a year ago, the biggest year-over-year decline in the history of the index.
Analysts said housing is being hurt currently by tighter lending conditions as banks react to soaring mortgage defaults and the reluctance of prospective buyers to make a decision, fearing that prices have further to fall.
Economists believe that if the country does slip into a recession, the downturn may not be as severe in manufacturing, which is being helped by continued strong growth overseas, which is bolstering U.S. exports.