Business First of Columbus – 4:30 PM EST Thursday

Sales of existing houses in the Midwest fell nearly 10 percent last month from November 2005 but remained nearly unchanged from October, the National Association of Realtors reported Thursday.

Some 1.42 million existing residences were sold throughout the Midwest last month, down 9.6 percent from 1.57 million a year earlier, spokesman Walter Molony said.

The median sale price was $165,000 last month, down 3.5 percent from $171,000 in November 2005.

The national median sale price was $218,000 in November, down 3.1 percent from $225,000 a year earlier.

David Lereah, the association’s chief economist, said that for every 1 percent drop in prices, an additional 50,000 buyers are drawn into the regional market.

“As the housing market recovers from its correction, existing home sales should be rising gradually during 2007,” Lereah said in a release. “We’ve entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down.”

Inventories fell 1 percent at the end of November to 3.82 million homes available for sale – considered a 7.3-month supply at the current sales pace.

Meanwhile, Freddie Mac reported the national average commitment rate for a 30-year conventional, fixed-rate mortgage was 6.24 percent in November, an improvement from 6.36 percent in October.

“This is increasing buying power at the same time that sellers are showing a willingness to negotiate price and terms,” association President Pat Combs said in the release. “Combined with a plentiful supply of homes on the market, there’s a window for buyers now with conditions that we haven’t seen prior to the beginning of the housing boom in 2001.”

Sunday, December 10, 2006
KENNETH HARNEY

Is real estate heating up, cooling down, headed for a deeper freeze or just hanging in there despite the challenges?

The latest federal report on home real-estate price appreciation offers support for each of those scenarios.

The third-quarter house price index compiled by the Office of Federal Housing Enterprise Oversight examined changes under way in 275 of the largest metropolitan markets.

As for the four scenarios:

• Yes, real estate is heating up. You have to be in the right markets, of course, but several dozen hot spots can be found around the country.

Consider Bend, Ore., where house values appreciated a stunning 30.7 percent rate during the 12 months ending Oct. 1, according to the survey. No dramatic bust or correction is taking place there — or in Myrtle Beach, S.C. (21.7 percent); Salt Lake City (20.4 percent) ; or El Paso, Texas (18.6 percent).

Overall, 37 metropolitan markets saw home-appreciation rates of 15 percent or more during the 12 months covered by the survey, and 16 states had average gains in excess of 10 percent.

• Yes, real estate is cooling down. The third-quarter index documented that conclusively. The average appreciation rate for houses nationwide dropped to 0.86 percent during the quarter, or just 3.4 percent annualized. That’s chillier than it has been since mid-1998.

In five states — Massachusetts, Michigan, New Hampshire, New York and Rhode Island — the quarterly rate went slightly negative.

• The deeper-freeze scenario is a question mark. The statistics show some sobering trends in two categories: areas where the regional economy has been struggling; and regions where corporate layoffs and plant closings have pushed unemployment higher.

Examples of the strugglingeconomy category include large swaths of the Midwest — Canton, Cleveland and Akron, for instance, and Detroit — that saw quarterly net depreciation slightly below 1 percent. Other areas fared even worse. Burlington, N.C., took the heaviest hit — 3.4 percent, an annualized 13.6 percent.

• Without question, the most impressive scenario is that many large metropolitan markets are still registering net appreciation, albeit at lower rates.

Examples include Miami-Miami Beach (14.7 percent annualized quarterly gain), Fort Lauderdale (10.3 percent), and Orlando, Fla. (6.5 percent); Los Angeles (7.4 percent); metropolitan Washington (3 percent); and Seattle (14.8 percent.