Foreclosures sank home prices in most cities

Washington —- Home prices fell in nearly nine out of every 10 U.S. cities in the fourth quarter of last year as low-cost foreclosures flooded the market and the housing market’s decline spread nationwide.

The National Association of Realtors said Thursday that median sales prices of existing homes declined in 134 out of 153 metropolitan areas compared with the same period in 2007. Sales fell in all but six states.

Nationwide, the median sales price was $180,100, down 12 percent from a year ago. But price declines of 30 percent or more were found in much of California, plus parts of Michigan, Florida, Arizona and Nevada. The biggest drop, of more than 50 percent, was in Fort Myers, Fla.

President Barack Obama visited Fort Myers this week in an effort to sell his economic rescue package, which lawmakers are preparing to send to his desk by Friday.

The states in which sales rose —- Nevada, California, Arizona, Florida, Minnesota and Virginia —- are places where buyers have been able to snap up foreclosed homes at a bargain. Sales more than doubled in Nevada, rose 85 percent in California, and nearly 43 percent in Arizona.

“We see a pattern of strong sales gains, particularly in lower-price homes, in areas with price declines resulting from foreclosures,” Lawrence Yun, the trade group’s chief economist, said in a prepared statement.

In California and Florida, sales of distressed properties accounted for about two-thirds of all sales, compared with about 45 percent nationally.

A nasty brew of strict lending standards, falling home values, soaring foreclosures and a severe recession is filtering through the housing market.

More than 2 million American homeowners faced foreclosure proceedings last year, and that number could soar as high as 10 million in the coming years depending on the severity of the recession, according to a report last month by Credit Suisse.

 Associated Press
HOME PRICES FELL IN MOST U.S. HOUSING MARKETS 
The median sales price of existing homes in the fourth quarter of 2008 declined in 134 of 153 metropolitan areas across the United States as compared with the same period in 2007. 

Map of U.S. shows various metro areas color-coded to indicate either an increase or decrease in median home prices: 
Median home prices in metro areas, fourth-quarter percentage change, 2007-08 
Source: National Association of Realtors