Why not use imfilter (if you have the image-processing toolbox) or conv2 - both should do this task in one line.
To your problem. You haven't told us what problem you run into, always do that when asking. The problem I manage to spot is that you don't initialize the variable sum before trying to access its value. Further, you don't re-set it to zero before starting to work on the next pixel. Then you increment the variable newpic, this is time-consuming, pre-allocate that variable first - you know it should have the same size as pic. Then I've never seen endfor in matlab.