Existing Home Sales Fall AGAIN

The National Association of Realtors reported today that existing home sales fell for the eighth straight month with median home prices dropping by a record amount. Nationally, sales of existing homes dropped by 1.2 percent in October to a seasonally adjusted annual rate of 4.97 million units. That represented the slowest sales pace on record going back to 1999 and was 20.7 percent below activity a year ago. The median price of a home sold in October, the point where half the homes sold for more and half for less, declined to $207,800, a drop of 5.1 percent from a year ago, the biggest year-over-year price decline on record.

My prediction: The rest of the year and first quarter 2008 will continue to be off 15 to 20 percent in terms of existing home sales. At that point I think we will start to see a stabilization.

So what does this mean for buyers and sellers in Philadelphia? I think that buyers—both investors and people who buy to live—are starting to believe that we are approaching the bottom of the market, so this may in fact be a good time to buy. Prices have adjusted on some properties that sellers need to sell, and buyers are recognizing the value and taking advantage.