Home sales hit slowest pace in 4 yearsBy Noelle Knox, USA Today - June 25th, 2007

Sales of existing homes fell in May to the lowest level in four years, and prices dipped for the tenth month in a row, the National Association of Realtors said Monday, because home buyers are still nervous about the market and some are having trouble getting loans.

Home sales in May slid to a seasonally adjusted annual rate of 5.99 million, almost flat from April, but off about 10% from May last year. For single-family homes, sales were down 11% from a year ago; condo sales were off about 7%.

And there is no relief in sight for home sellers for at least the next few months, because the inventory of properties on the market has swelled to an 8.9-month supply, highest in 16 years. That will continue to force homeowners to cut prices to entice hesitant buyers.

"The housing market may not be in a free fall, but it has not hit bottom yet, either," said Joel Naroff, president of Naroff Economic Advisors.

While the backlog of homes for sale is one problem, another is buyer psychology. Buyers are more reluctant to get into the market when prices are falling. The median price for an existing home fell about 2% to $223,700 from a year ago. The median is where half of the homes cost more, and half cost less.

The Commerce Department will release data Tuesday for new-home sales, and Stuart Hoffman, chief economist for PNC Financial Services, expects a "sharp decline" in the numbers.

A survey of home builders last week showed their confidence levels had plunged to the lowest level since 1991. Buyers are still cancelling orders, despite promises of free swimming pools, landscaping and other upgrades. In some cases, the buyers can't sell their existing homes, and in other cases they can't qualify for a loan.

Hoffman said, "I don't expect (the real estate market) to hit bottom for at least another year."

Note: Closer to home: At Lake Arrowhead, Georgia, according to The Arrowhead News, there were 147 homes available for sale in May 2007. One home sold in that month, although 24 were "under contract". However, according to information available from Trulia, only 15 homes have been sold since Jan 1, 2007, with January being the biggest sales month. The average of the other months was three units. Again, according to Trulia, there currently are 241 homes available at Lake Arrowhead.