Median home prices drop in most markets

Foreclosure sales worsen the decline

November 19, 2008|Associated Press

WASHINGTON - Home prices fell in a record 80 percent of US cities in the third quarter as foreclosures flooded the market and signs of decline spread nationwide.

Among 152 metropolitan areas included in a survey, 120 posted declines in median home sales prices, compared with a year earlier, the National Association of Realtors said yesterday.

Nationally, sales fell by almost 8 percent in the third quarter, compared with the same period a year before.

Sales of real estate in foreclosure and other distressed properties made up about 40 percent of transactions in the quarter, bringing down the median price by 9 percent to $200,500 from the same period a year earlier.

Sales fell in all but four states in the realtors' report: Nevada, California, Arizona, and Virginia. In those states, buyers have been able to snap up foreclosed homes at bargain prices.

"A very large proportion of distressed home sales are taking place at discounted prices, compared to more normal conditions a year ago," Charles McMillan, the realtors group's president, said in a prepared statement.

That's especially true in places like Sacramento and Riverside, Calif., where prices were down 37 and 39 percent, respectively, from last year. Those cities had the largest annual price declines in the report.

A nasty brew of strict lending standards, falling home values, and a tough economy is filtering through the housing market. By year's end, the foreclosure listing service RealtyTrac Inc. predicts, more than a million bank-owned properties will have piled up on the market. That would represent about a third of all properties for sale in the United States.

And if layoffs accelerate, that could put further downward pressure on prices.