Home sales heat up in West

Sales of existing homes jumped dramatically in the Western region in October as buyers scooped up foreclosed homes and other bargains.

About 104,000 existing homes and condos were sold last month in the 13-state region, a National Association of Realtors report released Monday shows.

Without adjusting for seasonal factors, sales rose almost 41 percent from the same month last year and climbed about 6 percent from September's total.

Sharply discounted foreclosures made up a large portion of overall sales, a growing trend the past several months. That helped drag down the median home price in the region by 27 percent from a year ago to $231,400, the group said.

Nationally, existing-home sales declined 4.6 percent from September and were essentially flat from October 2007. The U.S. median home price tumbled 11 percent to $183,300, the lowest level since March 2004.

October's sales reflect contracts signed in August and September, so sales could fall further this month amid the fallout from the recent stock-market plunge and sinking economy.

The West continued to lead the nation in terms of sales volume and median home-price declines.

Among major metro areas, Las Vegas, Los Angeles, San Diego and Phoenix posted the sharpest increases in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, another report released Monday.

Detroit showed the steepest decline in median price. San Francisco, Los Angeles, Las Vegas, Phoenix and San Diego rounded out the top six.

Sales declined sharply — at least 20 percent from a year ago — in several metro areas in the West, including Albuquerque, N.M.; Salt Lake City; Seattle; Honolulu; Portland; and Boise, AP-Re/Max report shows.

In markets where prices have dropped 20 percent or more, "volumes are coming back and have been pretty strong," said Pat Lashinsky, chief executive of online real-estate brokerage ZipRealty.

But while many buyers went ahead with home purchases despite the financial crisis that accelerated in late September, others were deterred. Some opted to take a wait-and-see approach, while others had to shelve purchases because they took a hit in the financial markets.

Some deals in October fell apart because buyers planned to use money tied up in stocks for their down payments.

Global Insight economist Patrick Newport expects sales to sink again when the Realtors group reports results for November as the economy sinks and lenders tighten their standards.

But other economists are encouraged that sales did not fall below June's rate of 4.85 million, the lowest point of the current housing bust.

"The market is showing signs of bottoming out," said David Resler, chief economist with Nomura Securities.

Businesses dependent on a healthy housing sector are calling on lawmakers and the incoming administration to subsidize lower mortgage rates and beef up tax credits in a desperate effort to stimulate housing demand nationwide.

Spending $50 billion to lower mortgage rates would yield about 500,000 more sales, the National Association of Realtors projects.

"If home prices overshoot downward, then it can lead to collateral damage to the economy," Lawrence Yun, the association's chief economist, said.

The cost would be "very reasonable" compared with the billions the government is spending to rescue major banks such as Citigroup, he said.

With similar goals, the National Association of Home Builders is leading a new "Fix Housing First" coalition to push for aid to the ailing housing sector.