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October 5th, 2007 6:24 PM

News Flash... Home Sales slide!!! Read more

October 5th, 2007 6:44 PM

Home sales slide to 2004 pace

Fewer condominiums on the market

By Jenny Burns - The Sun News

Real estate sales are still falling from last year's levels, but the number of condominiums on the market has dropped - a decline officials say comes because buyers are likely pulling units off the market.

Homes are selling at the same pace they did in 2004, but down 19 percent from last year, according to statistics from the Multiple Listing Service released Thursday. These statistics include sales from January through September.

Condo sales have dropped 38 percent from last year, and are selling at the same pace they did in 2003.

"Well, it's not getting worse. I don't look for numbers to start turning around for probably another year," said Tom Maeser, president of the Fortune Academy of Real Estate. "People need to hang tight. Sellers need to get realistic in pricing, and buyers have to realize they can't wait forever for good deals. There are definitely good deals out there."

Falling condo inventory is a good sign for the correcting market. There are 8,975 units on the market compared to 10,493 last year.

Rachel Broadhurst, president of Century 21 Broadhurst, said this is likely due to condo sellers deciding to wait to sell or choosing to rent out properties.

"We encourage people to do that sometimes," she said.

But single-family home inventory is up 20 percent to 6,344 homes from 5,291 last year.

Statistics from the first nine months recorded year-over-year price increases, but analysts say those are mostly due to more upper-end product selling and a large number of preconstruction condos that closed this year.

Many of the Strand's oceanfront condo prices have fallen to their late 2004 or early 2005 price levels.

Buyers' Choice Realty Broker-in-charge Mirela Monte said what happens on the oceanfront affects the rest of the area, and home prices inland are dropping as well but not as drastically as the oceanfront. When oceanfront prices skyrocketed in 2005, so did inland home prices.

The number of days homes stay on the market has continued to grow, with homes selling in 164 days compared to 143 last year and condos selling in 273 days compared to 188, according to the MLS.

It will take at least 15 months to sell the current supply of homes on the market at today's sales pace and 23 months for condos, Maeser said.

For this reason, Monte wants real estate agents to talk realistically about the market to their clients.

After a sales frenzy and skyrocketing prices in 2005, Monte calls what happened in 2006 "the paralysis period," where listings grew but there were few or no sales.

What follows she says is always "the big plummet," where sales happen at unbelievably low prices, well below established comparable sales. The plummet has happened on the oceanfront and is starting inland, but won't be as drastic there, Monte said. "Our third quarter statistics are dismal at best: only 9 percent of available condos have sold in the past quarter, only 18 percent of the homes and 5 percent of the lots available have sold in our area during the past three months," she said.

July, August and September are normally hot sales months on the Strand, she said.

"These disheartening figures may signal a more severe trend yet," Monte said.

While she anticipates prices will continue to drop, she tells her agents and clients that no one knows when prices will start rising again, so buyers should still purchase while prices are falling.

"After you realize it's occurred, it's too late. As long as you buy on the downturn you are going to make money," she said. Economist Mark Vitner of Wachovia said price declines are painful but necessary.

"A lot of people were priced out of the market and prices need to correct. It will move back into balance at some point in 2008," Vitner said.

The growing number of foreclosures will also lower prices because banks will be more willing to discount homes than investors who've lost money, Vitner said.

Inherent demand for beach living and coastal real estate bargains will continue to drive interest in purchasing, he said.

"In 2008, I think we'll see things even out. Sales should bottom out, but I don't expect them to pick way up. The overall economy will be better in 2009," he said.

Contact JENNY BURNS at 626-0305 or jeburns@thesunnews.com.

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