Sales of previously owned homes were down 3.1% in October from September and were 1.6% below the 2007 October sales number. The inventory of homes for sale fell from 4.27 million to 4.23 million. The median price declined to $183,300 nationally which is 11.3% below the October 2007 median price and takes the price level back to 2004 territory. Distressed sales accounted for 45% of all existing home sales.

Not much surprising in these numbers, in fact I thought they might be worse given the events in the credit markets in September. The National Association of Realtors which compiles the data suggested that sales would be sluggish for the remainder of the year. They also reported that 50% of loan modifications were failing. I don’t know the source of their number but it is consistent with other failure rates that are being reported.

Calculated Risk had an interesting take on the numbers. They argue that once we work through the inventory of foreclosures, sales are likely to be slow for a number of years. They cite a number of factors that will contribute to stagnant sales and I have to say I found their logic compelling. Take a look at their analysis and let me know if you see any flaws.

more: Calculated Risk, Reuters