Marketplace: Realtors' Sales in Slump

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ALEX CHADWICK, host:

Back now with DAY TO DAY, with more evidence that the housing market is cooling off. The National Association of Realtors reports today that home sales dropped in 28 states and the District of Columbia this spring. Nationwide, home sales fell 7 percent between April and June. It was a lot worse than that in some places.

MARKETPLACE'S Amy Scott is here. Amy, some of the biggest declines took place in what had been some of the hottest markets.

AMY SCOTT reporting:

That's right. Sales in Arizona dropped nearly 27 percent, same with Florida. In California, sales fell by more than 25 percent. It makes sense, you know, that markets that saw the biggest gains would have further to fall, but areas that had moderate growth during the boom years are actually still going strong.

Twenty states saw sales increases during the spring. Home sales in Alaska, for example, jumped nearly 49 percent. Arkansas was up almost 18 percent. Texas was up, North Carolina, Vermont. These are all states where prices have stayed relatively affordable and where job growth is healthy enough to keep people buying.

Walter Maloney is with the National Association of Realtors. He says all that adds up to that soft landing economists have been hoping for.

Mr. WALTER MALONEY (National Association of Realtors): One of the biggest changes that we see now with regards to past slow-downs in housing activity, and that is you've got a favorable economic backdrop. You still have affordable interest rates, you still have positive economic growth, and you've got job creation. And those conditions are fostering the soft landing that we're presently experiencing.

CHADWICK: Well, not everyone agrees that it's a soft landing coming, but anyway you mentioned prices. Are they starting to come down, do you think?

SCOTT: Well, the national median price for an existing single-family home between those months April and June was about $227,000. That's up 3.7 percent from last year. And one place that saw a really big jump in prices - about 27 percent - was Baton Rouge, Louisiana, which is still apparently fallout from Hurricane Katrina. Prices did come down in the Detroit area and about 25 other cities, but overall prices really aren't rising as much as they were.

CHADWICK: Just a note, another sign of sign of slowing economy: wholesale inflation up just a very little bit last month.

SCOTT: Yes, the Labor Department came out with its producer price index for July, and the core number - that is excluding food and energy prices - actually fell last night. We'll find out about consumer prices tomorrow, but between today's housing news and that report, analysts are saying signs are the economy is slowing down.

Coming up later today on MARKETPLACE, we'll find out why one commentator says it's time to break up Wal-Mart.

CHADWICK: Thank you, Amy. Amy Scott of Public Radio's daily business show MARKETPLACE, produced by American Public Media.

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