Home prices continue sharp descent

Steep drops in home prices scourge the West, while prices in the Heartland stabilize. The bottom line? Single-family home sales saw a 7.7% price decline in Q1.

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NEW YORK (CNNMoney.com) -- Single-family home prices dropped 7.7% in the first quarter in the largest year-over-year decline since the National Association of Realtors began reporting prices in 1982.

The median sales price fell to $196,300, down 4.8% compared with the last three months of 2007.

Lawrence Yun, the chief economist of NAR, attributed much of the record decline to liquidity problems dragging down high-priced markets.

"These are highly unusual results because there were very few jumbo loan originations in the latest quarter," he said. "So sales are much slower in high-cost areas."

Jumbo mortgages skew results

That sales slowdown changed the mix of houses sold.

In California, according to Yun, homes bought with jumbo mortgages - more than $417,000 - accounted for 40% of all sales before liquidity for these loans dried up during the summer of 2007. Since then only 10% of sales in California involved jumbo loans.

In February, Freddie Mac and Fannie Mae, the government sponsored enterprises that guarantee a market for conforming loans, have raised the $417,000 cap to include mortgages of up to $729,750, but lenders were still charging much higher rates for these "conforming jumbos," between 1% and 1.5% more than ordinary conforming loans. The higher rates are discouraging sales in higher price ranges and so skewed NAR's median price results.

Many of these same markets were also among the hardest hit by the subprime implosion, which forced many lower priced homes back on the markets, again dragging down NAR's results.

That helped put many California and other Sun Belt cities, with their toxic combinations of both high prices and heavy proportions of subprime mortgages, among the biggest losers.

In California, Sacramento prices plummeted 29.2% to $258,500 compared with last year and Riverside prices fell 27.7% to $287,100. Prices in Las Vegas fell 20.2% to $247,600 and those in Phoenix dropped 15.4% to $222,200.

Some Midwestern cities, hard hit by factory closings, also suffered huge losses with Lansing, Mich., prices falling 26.9%. Saginaw, Mich., had the lowest median prices of any of the 150 markets studied; a median house in Saginaw sold for just $65,400.

"You have two themes: the weak industrial economies under increasing pressure by struggles of the Big Three automakers and the deflating of what were once the most prominent bubble markets," said Michael Youngblood, an analyst with FBR Investment Management.

About of a third of the markets did show gains. The best performer in the nation was Binghamton, N.Y., where prices rose 11.8% to $109,700. Then came Peoria, Ill., up 10.4% to $119,000 and Spartanburg, S.C., where prices rose 10.2% to $130,300.

Regionally, in the Northeast, single-family home prices rose slightly, 3.2% to $280,000. But prices in the South dropped 7.5% to $164,200, in the Midwest they fell 7.9% to $142,700 and in the West they plunged 12.3% to $296,300.

Foreclosures put more homes in play

Hurting home prices were big rises in foreclosure rates over the past 12 months, which threaten to get even worse. Delinquencies more than doubled over that time and more than 155,000 lost their homes in bank repossessions during the first three months of the year. With many adjustable rate mortgages (ARMs) poised to reset this year to higher interest rates, defaults could go even higher.

"Yes, but I hasten to say it's not merely the ARMs," said Youngblood. "Fixed rate loans are performing poorly as well."

All that foreclosure activity added to the glut of homes on the market. The total inventory has risen to an average of 10 months worth of unsold homes. In addition, a record number - 2.9 million - of vacant homes are up for sale, according to the Census Bureau.

The big inventory has led to aggressive price slashing and increased incentives by builders looking to sell homes. They've also cut way back on housing starts, which are at a 17-year low.

The pace of existing home sales, at about 492,000 a month, is about a third less than its peak during the summer of 2005.

Condo prices fared a bit better than single-family homes. The median price fell just 3% since early 2007. The worst hit market was the Sarasota area, where condos dropped 35% over the past 12 months to $268,500. Sacramento condo price cratered 33.4% to $147,200. In Miami, prices fell 26.4% to $176,100.

The best performing condo market was about as far from the madding crowds of South Beach as one can get: Bismarck, N.D., condo prices soared 36.4% compared with 12 months ago, to $124,900.

The price declines in falling markets may not have run their course. Some analysts point to low home prices in many Midwestern cities and assert there's not much room for prices to fall but Youngblood disagrees.

"If we'd had this discussion a year ago, we would have said the same thing - how much further can they fall?" he said. "But jobs are declining and people are moving out and you're getting sharper home price declines than you ordinarily would."

Also, according to Youngblood, the sheer volume of foreclosures takes a toll. "Recent studies report that foreclosed properties sell for an average of 20% less than comparable properties that have not been foreclosed on," he said.

As for the bubble markets that have already lost 30% of their values, Youngblood thinks their declines are not over. He expects some to drop another 20% or so through February 2009. To top of page

NAR 1st quarter 2008 home prices
Metro Area Median Price
1Q 2008 (in thousands)
% Change
(1-yr)
Akron, OH $96,300 -13.2%
Albany-Schenectady-Troy, NY $194,100 -3.8%
Albuquerque, NM $190,500 -1.7%
Allentown-Bethlehem-Easton, PA-NJ $237,000 -4.2%
Amarillo, TX $122,200 8.2%
Anaheim-Santa Ana, CA (Orange Co.) $597,900 -14.3%
Appleton, WI $121,500 -4.0%
Atlanta-Sandy Springs-Marietta, GA $154,000 -9.6%
Atlantic City, NJ $277,400 4.8%
Austin-Round Rock, TX $184,500 4.7%
Baltimore-Towson, MD $270,500 -3.0%
Barnstable Town, MA $354,600 -4.7%
Baton Rouge, LA $169,200 -3.6%
Beaumont-Port Arthur, TX $122,900 6.1%
Binghamton, NY $109,700 11.8%
Birmingham-Hoover, AL $153,200 -2.7%
Bismarck, ND $153,400 2.7%
Bloomington-Normal, IL $150,900 2.5%
Boise City-Nampa, ID $193,400 -5.2%
Boston-Cambridge-Quincy, MA-NH** $357,100 -7.8%
Boulder, CO $355,700 -4.0%
Bridgeport-Stamford-Norwalk, CT $439,300 -6.7%
Buffalo-Niagara Falls, NY $96,600 5.5%
Canton-Massillon, OH $88,500 -12.0%
Cape Coral-Fort Myers, FL $213,200 -17.0%
Cedar Rapids, IA $130,000 0.5%
Champaign-Urbana, IL $139,400 -4.1%
Charleston-North Charleston, SC $201,400 -8.2%
Charleston, WV $116,800 1.4%
Charlotte-Gastonia-Concord, NC-SC $192,700 3.8%
Chattanooga, TN-GA $125,200 -3.4%
Chicago-Naperville-Joliet, IL $249,600 -6.6%
Cincinnati-Middletown, OH-KY-IN $128,500 -6.1%
Cleveland-Elyria-Mentor, OH $102,100 -16.9%
Colordo Springs, CO $208,900 -1.6%
Columbia, MO $143,900 -1.1%
Columbia, SC $141,600 -0.6%
Columbus, OH $131,400 -7.2%
Corpus Christi, TX $136,800 4.9%
Cumberland, MD-WV $95,000 -5.0%
Dallas-Fort Worth-Arlington, TX $142,400 -2.1%
Danville, IL N/A N/A
Davenport-Moline-Rock Island, IA-IL $88,600 -17.0%
Dayton, OH $100,500 -7.7%
Decatur, IL $79,400 4.2%
Deltona-Daytona Beach-Ormond Beach, FL $175,600 -10.9%
Denver-Aurora, CO $223,500 -6.6%
Des Moines, IA $147,900 1.7%
Detroit-Warren-Livonia, MI N/A N/A
Dover, DE $199,100 0.6%
Durham, NC $178,200 0.5%
Elmira, NY $82,500 9.6%
El Paso, TX $134,600 8.5%
Erie, PA $96,200 4.0%
Eugene-Springfield, OR $227,500 -3.9%
Fargo, ND-MN $136,900 -0.4%
Farmington, NM $190,000 6.3%
Ft. Wayne, IN $88,700 -4.0%
Gainesville, FL $188,300 -13.0%
Gary-Hammond, IN $124,000 -1.7%
Glens Falls, NY $163,100 7.7%
Grand Rapids, MI $102,800 -20.7%
Green Bay, WI $137,000 -5.6%
Greensboro-High Point, NC $142,300 -1.9%
Greenville, SC $154,500 6.0%
Gulfport-Biloxi, MS $139,000 -9.6%
Hagerstown-Martinsburg, MD-WV $192,700 -7.9%
Hartford-West Hartford-East Hartford, CT $247,300 -3.0%
Honolulu, HI $620,000 Unch
Houston-Baytown-Sugar Land, TX $148,400 0.8%
Indianapolis, IN $107,300 -4.6%
Jackson, MS $123,600 -13.0%
Jacksonville, FL $185,700 -6.0%
Kalamazoo-Portage, MI N/A N/A
Kankakee-Bradley, IL $119,300 -8.0%
Kansas City, MO-KS $139,500 -4.3%
Kennewick-Richland-Pasco, WA $163,700 0.2%
Kingston, NY $237,800 -4.3%
Knoxville, TN $146,000 -2.7%
Lansing-E.Lansing, MI $92,600 -26.9%
Las Vegas-Paradise, NV $247,600 -20.2%
Lexington-Fayette,KY $138,900 -5.8%
Lincoln, NE $134,000 -0.3%
Little Rock-N. Little Rock, AR $127,200 3.8%
Los Angeles-Long Beach-Santa Ana, CA $459,400 -21.3%
Louisville, KY-IN $131,600 -1.3%
Madison, WI $217,100 -1.8%
Memphis, TN-MS-AR $110,800 -18.5%
Miami-Fort Lauderdale-Miami Beach, FL $318,900 -17.2%
Milwaukee-Waukesha-West Allis, WI $204,400 1.3%
Minneapolis-St. Paul-Bloomington, MN-WI $199,900 -10.2%
Mobile, AL $129,900 -0.4%
Montgomery, AL $133,700 0.8%
Nashville-Davidson--Murfreesboro, TN N/A N/A
New Haven-Milford, CT $255,500 -9.5%
New Orleans-Metairie-Kenner, LA $157,100 0.8%
New York-Northern New Jersey-Long Island, NY-NJ-PA $445,400 -3.9%
New York-Wayne-White Plains, NY-NJ $491,900 -5.7%
NY: Edison, NJ $361,200 -0.6%
NY: Nassau-Suffolk, NY $462,200 -3.5%
NY: Newark-Union, NJ-PA $409,300 -3.4%
Norwich-New London, CT $244,900 N/A
Ocala, FL $145,500 -13.3%
Oklahoma City, OK $124,900 -7.1%
Omaha, NE-IA $132,900 -1.0%
Orlando, FL $232,000 -13.1%
Palm Bay-Melbourne-Titusville, FL $158,800 -17.0%
Pensacola-Ferry Pass-Brent, FL $156,300 -4.2%
Peoria, IL $119,000 10.4%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $220,900 -0.7%
Phoenix-Mesa-Scottsdale, AZ $222,200 -15.4%
Pittsburgh, PA $111,600 2.4%
Pittsfield, MA $216,600 2.8%
Portland-South Portland-Biddeford, ME $234,000 -0.3%
Portland-Vancouver-Beaverton, OR-WA $286,600 -1.1%
Providence-New Bedford-Fall River, RI-MA $262,900 -8.1%
Raleigh-Cary, NC $228,100 2.4%
Reading, PA $148,400 5.0%
Reno-Sparks, NV $283,700 -12.9%
Richmond, VA N/A N/A
Riverside-San Bernardino-Ontario, CA $287,100 -27.7%
Rochester, NY $108,500 1.5%
Rockford, IL $115,200 1.9%
Sacramento--Arden-Arcade--Roseville, CA $258,500 -29.2%
Saginaw-Saginaw Township North, MI $65,400 N/A
Saint Louis, MO-IL $121,400 -9.7%
Salem, OR $218,500 -1.4%
Salt Lake City, UT $225,700 3.5%
San Antonio, TX $149,800 1.0%
San Diego-Carlsbad-San Marcos, CA $459,000 -22.9%
San Francisco-Oakland-Fremont, CA $701,700 -6.1%
San Jose-Sunnyvale-Santa Clara, CA $780,000 -1.0%
Sarasota-Bradenton-Venice, FL $262,300 -22.2%
Seattle-Tacoma-Bellevue, WA $372,300 -2.1%
Shreveport-Bossier City, LA $131,500 1.9%
Sioux Falls, SD $136,000 -3.0%
South Bend-Mishawaka, IN $80,900 -5.5%
Spartanburg, SC $130,300 10.1%
Spokane, WA $186,800 2.8%
Springfield, IL $107,200 4.2%
Springfield, MA $198,100 -4.4%
Springfield, MO $120,900 2.6%
Syracuse, NY $110,300 2.6%
Tallahassee, FL $173,300 -5.7%
Tampa-St.Petersburg-Clearwater, FL $184,700 -9.1%
Toledo, OH $89,700 -13.8%
Topeka, KS $103,300 -2.8%
Trenton-Ewing, NJ $288,200 1.6%
Tucson, AZ $221,000 -8.8%
Tulsa, OK N/A N/A
Virginia Beach-Norfolk-Newport News, VA-NC $237,600 1.6%
Washington-Arlington-Alexandria, DC-VA-MD-WV $371,800 -13.1%
Waterloo/Cedar Falls, IA $104,000 0.1%
Wichita, KS $112,700 4.0%
Worcester, MA $248,200 -8.3%
Yakima, WA $148,400 9.0%
Youngstown-Warren-Boardman, OH-PA $67,700 -13.5%
U.S. $196,300 -7.7%
NE $280,000 3.2%
MW $142,700 -7.9%
SO $164,200 -7.5%
WE $296,300 -12.3%
Note1: California prices provided by the California Association of REALTORS®
*All areas are metropolitan statistical areas (MSA) as defined by the US Office of Management and Budget as of 2004.
** Boston-Cambridge-Quincy, MA-NH - Data from New Hampshire not available
They include the named central city and surrounding areas. N/A Not Available p Preliminary r Revised
©2008 National Association of REALTORS® © 2008 National Association of REALTORS®
Metro Area Median Price
1Q 2008 (in thousands)
% Change
(1-yr)
Albuquerque, NM $154,100 4.8%
Atlanta-Sandy Springs-Marietta, GA N/A N/A
Austin-Round Rock, TX $177,000 4.7%
Baltimore-Towson, MD $227,100 -5.1%
Bismarck, ND $124,900 36.4%
Boston-Cambridge-Quincy, MA-NH $287,800 -1.7%
Boulder, CO $214,200 -0.6%
Bridgeport-Stamford-Norwalk, CT N/A N/A
Cape Coral-Fort Myers, FL $183,100 -24.6%
Chicago-Naperville-Joliet, IL $239,400 7.0%
Cincinnati-Middletown, OH-KY-IN $117,300 -3.5%
Cleveland-Elyria-Mentor, OH N/A N/A
Colorado Springs, CO $141,800 -6.6%
Columbus, OH $132,000 6.8%
Dallas-Fort Worth-Arlington, TX $133,500 7.3%
Greensboro-High Point, NC $114,700 2.3%
Hartford-West Hartford-East Hartford, CT $171,600 4.6%
Honolulu, HI $330,000 3.1%
Houston-Baytown-Sugar Land, TX $128,800 1.0%
Indianapolis, IN $110,000 -13.7%
Jacksonville, FL $138,500 -6.4%
Knoxville, TN $150,800 2.6%
Las Vegas-Paradise, NV $160,300 -20.8%
Los Angeles-Long Beach-Santa Ana, CA $343,700 -12.6%
Louisville, KY-IN $127,800 0.2%
Madison, WI $172,800 2.0%
Miami-Fort Lauderdale-Miami Beach, FL $176,100 -26.4%
Milwaukee-Waukesha-West Allis, WI $170,600 -1.2%
New Haven-Milford, CT $163,900 -8.7%
New Orleans-Metairie-Kenner, LA $170,500 15.3%
Norwich-New London, CT $182,200 N/A
New York-Wayne-White Plains, NY-NJ $333,800 1.8%
NY: Newark-Union, NJ-PA $318,300 7.6%
NY:Edison, NJ $274,500 0.0%
NY:Nassau-Suffolk, NY $249,900 0.6%
Palm Bay-Melbourne-Titusville, FL $116,100 -3.0%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $198,400 1.8%
Phoenix-Mesa-Scottsdale, AZ $189,800 4.6%
Portland-South Portland-Biddeford, ME $177,100 -7.9%
Portland-Vancouver-Beaverton, OR-WA $214,600 11.5%
Providence-New Bedford-Fall River, RI-MA $207,300 -1.7%
Reno-Sparks, NV $187,100 -0.5%
Richmond, VA $180,000 -5.5%
Riverside-San Bernardino-Ontario, CA N/A N/A
Rochester, NY $116,000 -1.0%
Sacramento--Arden-Arcade--Roseville, CA $147,200 -33.4%
Salt Lake City, UT $162,400 -1.3%
San Diego-Carlsbad-San Marcos, CA $294,200 -19.5%
San Francisco-Oakland-Fremont, CA $546,700 -6.5%
Sarasota-Bradenton-Venice, FL $268,500 -35.0%
Springfield, MA $144,700 -4.2%
Syracuse, NY $111,100 -9.1%
Tampa-St. Petersburg-Clearwater, FL $152,800 -11.1%
Toledo, OH $135,700 -3.1%
Trenton-Ewing, NJ $250,000 3.4%
Tucson, AZ $135,400 -14.7%
Virginia Beach-Norfolk-Newport News, VA-NC $185,800 7.3%
Washington-Arlington-Alexandria, DC-VA-MD-WV $277,300 -4.9%
Wichita, KS $106,600 11.7%
Worcester, MA $186,400 -4.1%
U.S. $216,900 -3.0%
NE $250,900 -0.8%
MW $196,600 1.2%
SO $173,000 -3.9%
WE $235,400 -11.3%
*All areas are metropolitan statistical areas (MSA) as defined by the US Office of Management and Budget as of 2004.
** Boston-Cambridge-Quincy, MA-NH - Data from New Hampshire not available
They include the named central city and surrounding areas. N/A Not Available p Preliminary r Revised
© 2008 National Association of REALTORS®
State Total Sales
(in thousands)
% Change
(1-yr)
ALABAMA $98,400 -20.9%
ALASKA $34,800 2.4%
ARIZONA $91,600 -31.0%
ARKANSAS $73,600 -12.4%
CALIFORNIA $310,400 -33.4%
COLORADO $117,200 -8.4%
CONNECTICUT $52,800 -24.1%
DELAWARE $12,000 -31.8%
District of Columbia $7,600 -34.5%
FLORIDA $246,000 -27.0%
GEORGIA $188,400 -19.8%
HAWAII $22,400 -23.3%
IDAHO $18,000 -33.1%
ILLINOIS $200,800 -26.1%
INDIANA $168,400 11.4%
IOWA $57,600 -27.6%
KANSAS $65,600 -10.9%
KENTUCKY $87,200 -12.1%
LOUISIANA $66,400 -19.0%
MAINE $21,600 -26.0%
MARYLAND $68,000 -38.6%
MASSACHUSETTS $99,200 -29.1%
MICHIGAN $178,800 -4.3%
MINNESOTA $104,000 -10.7%
MISSISSIPPI $55,200 -8.6%
MISSOURI $124,800 -8.0%
MONTANA $22,400 -16.4%
NEBRASKA $33,600 -12.5%
NEVADA $46,400 -21.1%
NEW HAMPSHIRE $19,200 N/A
NEW JERSEY $169,600 4.0%
NEW MEXICO $37,600 -28.2%
NEW YORK $265,600 -19.5%
NORTH CAROLINA $181,600 -25.6%
NORTH DAKOTA $13,200 -13.2%
OHIO $242,000 -10.8%
OKLAHOMA $94,800 -10.2%
OREGON $61,200 -29.5%
PENNSYLVANIA $176,800 -14.2%
RHODE ISLAND $13,200 -29.8%
SOUTH CAROLINA $94,400 -16.9%
SOUTH DAKOTA $17,200 -2.3%
TENNESSEE $134,000 -13.0%
TEXAS $517,200 -12.1%
UTAH $32,000 -33.9%
VERMONT $12,000 -16.7%
VIRGINIA $102,000 -24.8%
WASHINGTON $102,800 -29.4%
WEST VIRGINIA $29,600 -11.9%
WISCONSIN $83,200 -24.1%
WYOMING $14,000 -10.3%
United States $495,000 -22.2%
Northeast $86,700 -23.9%
Midwest $120,300 -18.3%
South $195,300 -21.3%
West $93,000 -26.8%
N/A Not Available r Revised p Preliminary
© 2008 National Association of REALTORS®
Note: State will not add up to national/regional totals due to independent samples.
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