NEW YORK (AP) – Existing home sales in the Northeast dropped more than 9 percent in October from last year, while the median sales price in the region sank 5 percent to $277,000, the National Association of Realtors said Monday.

Sales in the Northeast were softer than the national numbers, but price declines were more moderate. Sales nationwide – without adjusting for seasonal factors – slipped less than 1 percent in October from a year ago, while the median price fell nearly 12 percent to $224,700.

Northeast faring well

Sales in three major Northeast cities posted positive gains in October, according to the Associated Press-Re/Max Monthly Housing Report, also released Monday. Only two of the nine Northeast metro areas surveyed recorded a drop in sales of more than 20 percent from a year ago. The report analyzed sales transactions recorded by all real estate agents in those metro areas, regardless of company affiliation.

While the Northeast hasn’t suffered as much from the onslaught of foreclosures like areas in the West, the region’s housing market hasn’t been spared by the deteriorating economy, said Michael Lynch, regional economist at Global Insight.

He said the largest economy in New England, Massachusetts, is starting to show cracks after seeming “resilient” for the past several months. Job losses are mounting, which could be a harbinger for the rest of the region.

“It’s the place to watch right now,” Lynch said.

Wall Street effects

In the lower parts of the Northeast, the turmoil on Wall Street threatens local economies and housing markets, especially in New Jersey and suburban New York. The area could lose up to 50,000 financial jobs, some economists estimate.

Already, the New York City suburban housing market is teetering, said real estate agent Sandra Lippman of Prudential Centennial Realty in Westchester County, north of the Big Apple.

Bright spots

There were some bright spots among the Northeast cities in the AP-Re/Max report. Pittsburgh posted a modest year-over-year price gain of more than 1 percent in October, the only metro area to record appreciation. Its inventory also fell by a quarter from a year ago. However, sales there were down almost 27 percent.

Sales volume rose over last year in Boston, Providence, R.I., and Manchester, N.H. Manchester led the group with a more than 11 percent increase. Providence recorded a 4 percent gain and Boston, a 3 percent increase.

“Even though things are erratic, there is more activity,” said real estate agent Julie Longtin of Re/Max Professionals in East Greenwich, R.I. “People are thinking possibly the bottom is here.”

But downtown Providence is still reeling from too many condos and rampant lending to riskier borrowers during the boom. About one in four sales are bank-owned properties or short sales, in which the lender agrees to accept a sales price below the balance owed on the mortgage, she said.

The median price of a Providence home tumbled more than 12 percent in October, from a year ago, the largest decline of the Northeast metro areas. The supply of unsold homes decreased by 6 percent from October of last year.

Still, Longtin said, “We’re on the cusp of stabilization if nothing else goes dramatically wrong.”

Providence sellers, like Steve Testa, also are coming to terms with the market and lowering their asking prices enough to lure buyers.

Testa, 55, put his split-level ranch house in Cranston, a Providence suburb, on the market in January for $339,000. With very few nibbles, he slashed the price to $302,500 in the summer. Finally, to nab one buyer who kept coming back, he reduced the price even more.

The final selling price for the three-bedroom house: $297,500.

“If we didn’t negotiate with this potential buyer,” he said, “there was a very distinct possibility we would be in the house through the holidays and into the springtime.”


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