Existing-home sales decline again

WASHINGTON — Sales of existing homes fell in June for a fourth consecutive month, further evidence that housing troubles are far from over.

The National Association of Realtors reported Wednesday that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units. That is the slowest sales pace since November 2002 and the decline was about twice what had been expected.

The median price of an existing home edged up to $230,100, 0.3 percent more than a year ago. The median is the point where half the homes sold for more and half for less.

It was the first price gain in 11 months. Analysts, however, said they were looking for prices to fall further because of the high level of unsold homes.

For June, the median price of a single-family home rose by 0.1 percent and the price of a condominium increased by 2.6 percent compared with a year ago.

"With inventories still way out of line, unless prices fall a lot more, the housing market will not turn around any time soon," said Joel Naroff, chief economist at Naroff Economic Advisors.

Fed Chairman Ben Bernanke told Congress last week that he expected housing to be a less-severe drag on growth in the coming months. Many private economists are not as optimistic. They note that existing home sales fell at an annual rate of 28 percent from April through June, the steepest in the downturn.

"Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year," said Ian Shepherdson, chief economist at High Frequency Economics, a private forecasting firm.

The housing slump follows five boom years when sales of new and existing homes set records and home prices soared by double-digit rates. Since late 2005, sales have slumped as mortgage rates rose and prospective buyers balked at selling prices.

Those problems have worsened in recent months because of troubles in the subprime-mortgage market, which offered loans to buyers with spotty credit histories.

The declines in existing home sales in June covered all parts of the country. Sales fell by 7.3 percent in the Northeast, 6.8 percent in the West, 2.8 percent in the Midwest and 1.7 percent in the South. This mirrors what happened in the Puget Sound region last month, although exact comparisons cannot be made based on the available data.

Nationally, June sales of existing homes were 11.4 percent below the previous June. Prices were up 0.3 percent.

Meanwhile, King County's pending sales for new and existing homes were down 9.4 percent last month compared with a year earlier, and prices were up 7.1 percent, according to the Northwest Multiple Listing Service, which does not divide new and existing home sales.

Snohomish County's pending sales were down 18.1 percent and prices were up 8 percent.

Pierce County's pending sales were down 24 percent and prices were up 1 percent.

Kitsap County's pending sales were down 21 percent and prices were up 12.4 percent.

All four counties also reported the number of homes on the market increased significantly compared with the previous June, with King County seeing a 53 percent increase, Snohomish a 61 percent increase, Pierce a 53 percent increase and Kitsap a 37 percent increase.

These figures reflect combined activity for single-family houses, condominiums, town homes and co-ops.

The Realtors are forecasting that sales of existing homes will fall by 5.6 percent this year and prices will drop by 1.4 percent. That would be the first annual price decline based on records that the Realtors have kept for more than four decades.

Seattle Times reporter Elizabeth Rhodes contributed to this report.