WASHINGTON – Many homeowners looking to sell during the summer got burned by a cooling housing market.
Sales of existing homes fell in 38 states during the summer, led by steep declines in traditional housing hotbeds such as Nevada, Arizona, Florida and California, as the once-booming market showed further signs of a steep slowdown.
The National Association of Realtors reported that sales dipped to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago.
Sales of both existing and new homes set records for a fifth consecutive year in 2005 but have been falling steadily this year as conditions in the housing market have deteriorated.
The states suffering the steepest drops were home to a sizzling market in the summer of 2005. Sales fell by 38 percent in Nevada, 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California. In all, nine states had sales declines in the summer of 20 percent or more compared to the third quarter of 2005.
Sales rose in 10 states and in two states — New Hampshire and Vermont — the Realtors did not have available data.
The weakness in sales also affected prices with 45 metropolitan areas experiencing price declines, according to a separate survey the Realtors did of 148 metropolitan areas.
The price survey showed that the median — or mid-point — price for an existing home sold in the third quarter dipped to $224,900, down 1.2 percent from a year earlier.
The nationwide 12.7 percent fall in sales was from a summer 2005 pace of 7.18 million units, which was the second highest in history. The all-time record sales pace was an annual rate of 7.19 million units set in the April-June quarter of last year.
The plunge in housing shaved a full percentage-point off economic growth in the July-September quarter with economists predicting a similar reduction in the current quarter.
But David Lereah, the Realtors' chief economist, said he believed the decline in prices in formerly red-hot areas of the country was setting the stage for a rebound next year.
"With the market in full transition, buyers now have choices and sellers are more willing to negotiate," he said. "Under these circumstances, it's no surprise that overall home prices are slightly below a year ago."
Reuters contributed to this report.