The pace of existing home sales in the U.S. fell for a fifth straight month in August and prices dropped from year-earlier levels for the first time in 11 years, the National Assn. of Realtors said Monday.
Median sale prices were lower in three of four major U.S. regions -- the Northeast, Midwest and South -- but were marginally higher in the West.
That could just be delaying the day of reckoning for the West, said David Lereah, the Realtors’ chief economist. “In California I think prices are going to have to come down harder,” he said.
The median price of all existing U.S. homes sold, including condominiums, was $225,000 in August, down 1.7% from $229,000 in August 2005.
It was the first year-over-year drop since April 1995. It reflected a record glut of homes on the market and a reluctance on the part of many buyers to pay up after the huge price gains of recent years, Lereah said.
“People want to get in but not at these prices,” he said.
Sales slipped to an annual rate of 6.3 million units from a 6.33-million pace in July.
Although sales were down 12.6% from August 2005, the 0.5% falloff in volume from July was the smallest in the last five months of declines.
Lereah said August’s modest sales decline was encouraging.
“This price drop, in my view, has stopped the bleeding in the sales marketplace,” he said.
He noted that August sales were up 1.9% from July in the Northeast -- the region that had the largest year-over-year price decline. The median price of homes sold was $271,000, down 3.9% from a year earlier.
Northeast sales were down 11.6% from a year earlier.
Among the other regions:
* In the Midwest sales in August inched up 0.7% from July and were down 11.1% from a year earlier. The median price was $176,000, down 1.1% from August 2005.
* In the South sales slipped 0.8% from July and were 7.4% below August 2005 levels. The median price was $184,000, down 2.6% from a year earlier.
* In the West sales fell 2.3% from July and were off 22.8% from a year earlier. The median price was $345,000, up 0.3% from August 2005.