Existing home sales edge up nationwide and in Puget Sound area

WASHINGTON — Sales of existing homes edged up slightly nationwide in May compared with April, a trend repeated in the Puget Sound area.

The National Association of Realtors reported that U.S. sales of existing single-family homes and condominiums rose by 2 percent to 4.99 million units last month.

Sales increased 3 percent in King County and 5.9 percent in Snohomish County last month compared with April, according to the Northwest Multiple Listing Service. In raw numbers that means an additional 61 homes sold in King and 43 in Snohomish.

Pierce County saw sales drop 15.1 percent, reflecting 135 fewer house and condo sales.

The local numbers include both existing and new homes because breakouts are not available.

Nationally, it was only the second sales increase in the past 10 months, but it was not viewed as a rebound that could be sustained. Many economists believe that prices will have to decline more before the housing industry can mount a sustained recovery.

The median price nationwide of an existing home sold in May dropped to $208,600, off 6.3 percent from a year go. That was the fifth biggest year-over-year price decline on records that go back to 1999.

King County's median price last month was $440,000 for single-family houses, reflecting a 6.2 percent price drop from a year earlier. The median price for the county's condominiums was down less than 1 percent to $287,925. This includes both new and old properties.

House prices in Snohomish and Pierce counties likewise were down in the 6 to 7 percent range compared with the previous May. In Pierce County, however, they fell 11.3 percent.

The strength in sales nationally reflected gains in all parts of the country except the South, where sales dropped by 0.5 percent. Sales were up 5.5 percent in the Midwest, 4.6 percent in the Northeast and 2 percent in the West.

Paul Bishop, senior economist for the Realtors, said that for the past few months sales have been rebounding in parts of the country that had been hardest-hit by the housing bust, while sales have weakened in some areas that formerly had been immune from the overall downturn.

Distressed areas that now are seeing sales gains included Sacramento, the San Fernando Valley and Monterey in California; Sarasota, Fla.; and Battle Creek, Mich.

The inventory of unsold homes nationwide dropped by 1.4 percent to 4.49 million units, which represents a 10.8-month supply at the May sales pace, down from a 11.2-month supply in April. That's still about double the inventory level that existed during the five-year housing boom.

"Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets," said Lawrence Yun, the Realtors' chief economist.

However, rising mortgage foreclosures are dumping even more homes onto the already glutted housing market.

Many economists predict sales will keep falling through the summer and prices will not start to rebound until next spring.

Puget Sound data was compiled by Seattle Times reporter Elizabeth Rhodes.