Existing Home Prices in Record Free Fall: Report

Median sales prices for existing single-family homes continued to fall throughout the country in the fourth quarter, according to data released Thursday by the National Association of Realtors (NAR). The NAR reported that 134 — or 87.6 percent — of the 153 metropolitan statistical areas (MSAs) studied showed a decline in median existing home prices since the same quarter in 2007, “pulled down by active sales at the lower end that were driven by foreclosures.” One MSA — Sioux Falls, S.D. — showed no year-over-year change from $142,400 in the fourth quarter 2007. The national median existing single-family home price came in at $180,100 for the fourth quarter, a record fall of 12.4 percent during the fourth quarter when compared to the median of $205,700 during Q4 2007. Part of the drop was the result of a staggering ratio of foreclosure sales; 45 percent of transactions recorded for the quarter were distressed sales, according to the NAR’s data. “Distressed home sales have risen from about 38 percent of transactions in the third quarter, meaning people are responding to discounted prices and are slowly absorbing the excess inventory,” said president Charles McMillan, a broker with Dallas-Fort Worth-based Coldwell Banker Residential Brokerage. “Buyers clearly see value in today’s pricing.” Steep price declines of more than 30 percent from the previous-year period occurred in the Las Vegas-Paradise MSA in Nevada, seven Californian MSAs, the Phoenix-Mesa-Scottsdale MSA in Arizona as well as three MSAs in Florida. The steepest year-over-year decline occurred in Cape Coral-Fort Myers, a Florida-based MSA that saw a 50.8 percent decline from median home prices in the year-ago quarter, to $110,900 in the fourth quarter. A Texas-based MSA, Beaumont-Port Arthur, posted the largest increase in home price with a median $132,600 — a 16.7 percent increase from the year-ago quarter. Median prices in the quarter ranged from $43,900 in the Michigan-based Saginaw-Saginaw Township North MSA, to $610,000 in the Honolulu MSA. The NAR also reported that total state existing-home sales came in at a seasonally adjusted annual rate of 4.7 million units in the fourth quarter, a 6.4 percent decrease from the pace seen in the previous quarter, and a 5.9 percent decrease the rate reported for the year-ago quarter. Although the declining prices and slowing pace of existing home sales might not seem to paint a confidence-inspiring picture, NAR economists said the market may soon turn around if the housing provisions included in the financial stimulus package move through Congress onto the desk of the President soon. “If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” said NAR chief economist Lawrence Yun. Read a summary of the survey. Write to Diana Golobay at diana.golobay@housingwire.com.