DATE: Wednesday, March 5, 1997              TAG: 9703050492

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER 

                                            LENGTH:   49 lines

SLOW SALES OF HOMES MAY SIGNAL TOUGH TIMES FOR REGION

If you subscribe to the theory that slowing sales of big-ticket items like houses are the first sign of a recession, get ready, because Hampton Roads might be headed for one.

Then again, January's weak home sales might just be a continuation of the less-than-robust economy the region has been experiencing, area economists and real estate professionals say.

Pending sales of local homes fell 14 percent to 1,297 houses in January, compared with the 1,508 sold in January 1996, Virginia Association of Realtors figures show. Pending sales, houses under contract that have not closed, are the best indication of local home sales.

South Hampton Roads saw its January totals of 956 pending sales fall 13 percent compared with last year's figure of 1,095.

The Peninsula also watched its home sales slide. Pending sales reached 273 in January. That's 25 percent lower than the 362 houses under contract in January 1996.

``Everything we're reading about home sales shows that sales are moderating,'' said Lisa Noon, a spokeswoman for the state Realtors organization. ``We're seeing that the pent-up demand has really dissipated. We've just gone back to what's a normal flow of home sales. It doesn't necessarily mean the economy's slowing down, it just means it's moderating.''

Home sales rose dramatically between 1991 and 1994, but they've fallen since last summer on a seasonally adjusted basis, said John Whaley, chief economist of the Hampton Roads Planning District Commission.

The last two months of last year mirrored January's anemic totals.

Pending sales in November 1996 were down 26 percent in South Hampton Roads compared with November 1995. In December, pending sales on the south side crept up 0.12 percent vs. December 1995.

``Some slowdown in 1997 was certainly expected,'' said David Garraty, an economist and professor at Virginia Wesleyan College. ``I'm more convinced it's an indication of last year's flatness than coming flatness.''

Other real estate professionals suggested that the market is returning to a more cyclical pattern.

``A lot of the home sales were driven by the perception that interest rates are moving,'' said Louis Tourgee, president of CTX Mortgage. ``Now we've been in a period where interest rates have been stable for three years. It's a return to a more seasonal cycle than we've seen in the past.'' ILLUSTRATION: [Chart]

PENDING SALES

[For copy of chart, see microfilm]

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