Home prices down 1.2% in third quarter

NEW YORK (CNNMoney.com) -- Once-hot housing markets cooled considerably this summer: The National Association of Realtors (NAR) reported Monday that the median price of a single-family house in the third quarter dropped 1.2 percent from a year earlier, continuing a reversal of fortune for sellers that started last winter.

Prices in the Northeast, down 4.8 percent, fell the most. Prices dropped 2.6 percent in the Midwest, 0.9 percent in the West and 0.1 percent in the South.

The Detroit market, buffeted by auto industry layoffs, suffered the largest loss; prices there plummeted 10.5 percent, to a median of $154,100.

Other rustbelt areas with drops included Canton, Ohio (down 9.2 percent to $112,300), Akron (down 8.4 percent to $118,200) and Bloomington, Illinois (down 8.5 percent to $156,300).

Three Florida metro areas were hit hard by price drops. In Sarasota, the median home now sells for $320,700, off a whopping 9.4 percent from last year; Palm Bay/Melbourne/Titusville prices sank 9 percent to $193,600; and Cape Coral prices plunged 8 percent to $255,400.

Sarasota condo prices also dipped, 11 percent to $275,600, the largest drop in any condo market.

Surprisingly, 102 of 148 metro markets had price gains while only 45 fell. One remained the same.

The best performing market in the country was Salem, Oregon, where prices shot up 24.7 percent from a year earlier, to $228,000.

Condo prices suffered more than single-family homes with the national median at $222,900 in the third quarter, down 2.1 percent from the same period in 2005.

The most expensive metro area in the nation was in San Francisco/Oakland, where the median home price is $749,400. Two areas, Decatur, Illinois and Youngstown, Ohio shared the distinction of having the lowest prices - with medians of just $86,000.

Last year at this time real estate was bubbling; prices were recording year-over-year, double-digit increases every quarter. Markets finally started turning during the first quarter of 2006 and now are in retreat.

Even more dramatic than the price drops was the fall in the number of sales. Nationally, the total numbers for sales of existing single family homes, condos and co-ops went down 12.7 percent compared with the third quarter of 2005. The decline was off the charts in Nevada, down 38 percent. Arizona, ( - 36 percent), Florida (- 34.2 percent), California (- 28.6 percent), Hawaii (- 25.8 percent) and Virginia (- 24.4 percent) also experienced steep drops.