Home prices in record plunge

The National Association of Realtors reports that home prices dropped a record 12.4% in the final quarter of 2008 - the biggest decline in 30 years.

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NEW YORK (CNNMoney.com) -- Home prices fell 12.4% during the fourth quarter of 2008, the largest year-over-year decline since the National Association of Realtors began keeping comprehensive records in 1979.

The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.

Prices fell by a record 9.5% in 2008, to $197,100, compared to $217,900 in 2007. In comparison, median home prices dipped a mere 1.6% between 2006 and 2007.

Distressed properties, the foreclosures and short sales that have flooded the market, accounted for 45% of all deals. That has driven sales volume up in Nevada, California and other states hit hard by foreclosures, but these heavily discounted homes have also pushed median prices down.

"People are responding to discounted prices and are slowly absorbing the excess inventory," said NAR President Charles McMillan. "Buyers clearly see value in today's pricing."

Pain is widespread

The vast majority of metropolitan areas, 134 out of 153, recorded price declines compared with the last quarter of 2007.

"Home markets are weak just about everywhere," said Pat Newport, an analyst with HIS Global Insight, "but in a few states, distressed sales are driving transactions."

In Cape Coral-Ft. Myers, Fla., which has the third-highest rate of foreclosure filings in the nation, prices fell a devastating 50.8% for the year, to $110,900 from $225,300. That was the most precipitous plunge for any metro area.

In Saginaw, Mich., prices fell 41.4%. In Riverside-San Bernardino, Calif., prices dropped 40.8% and in San Jose, Calif., prices declined 37.7%.

The Beaumont-Port Arthur area of Texas bucked the national trend. Its median home price jumped 16.7% to $132,600 - the highest increase in the nation. Other winners included Bloomington, Ill., up 9.6%; Dover, Del., up 6.5%; and Bismarck, M.D., up 6%.

The high number of distressed sales pushed prices down for several reasons, according to Lawrence Yun, chief economist for NAR. For one thing, many sales were in low- and moderate-income housing developments where buyers during the boom years financed their purchases using subprime mortgages. In higher-end areas, fewer exotic mortgages were used.

"Take Orange County, Calif.," said Yun. "It's the lower priced areas there where homes are selling. The high priced areas along the coast are not." As a result, the median home sales price for the area skews lower.

And the high number of foreclosures means banks are willing to slash prices deeply to move inventory. Many of the properties they've obtained through repossessions now sit vacant, soaking up lender money for maintenance, heating, property taxes and insurance. The banks willingly take lower prices to end those cash outlays, which brings down prices even for normal sellers.

Then there's also what Yun calls a "frozen" jumbo-mortgage lending market, which has also slowed sales of higher-priced homes and reduced median prices.

The good news is that bargain prices are bringing many new buyers into the market. "Many are first-time homebuyers who were priced out of the market during the boom," Yun said.

Stimulus help

NAR is hoping a piece of the stimulus bill before Congress will build on that momentum and provide an extra incentive for buyers.

"Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for homebuyers, we could see a quick lift in home sales for the critical spring home-buying season," said Yun.

On Thursday, it appeared that the final iteration of the homebuyer's tax credit, which had very different provisions in the House and Senate versions of the stimulus package, was shaping up to be closer to the House bill, according to Yun.

That means a credit of $7,500, perhaps $8,000, or 10% of home price for first-time homebuyers. This windfall will not have to be repaid by homebuyers and can be taken off 2008 taxes. NAR estimates that could draw in an additional half-million buyers this year.

"It could help reduce the high inventory of homes for sale," said Yun, "and get housing markets moving again. It's hard to get the economy back to growth until that happened." To top of page

NAR 4th quarter 2008 home prices
Metro Area State Median home price
4th Quarter
Percent change from
4th Quarter 2007
Akron OH $86,100 -21.1%
Albany-Schenectady-Troy NY $193,100 -3.6%
Albuquerque NM $183,700 -6.2%
Allentown-Bethlehem-Easton PA-NJ $238,000 -3.4%
Amarillo TX $122,600 2.0%
Anaheim-Santa Ana CA $464,800 -30.8%
Appleton WI $127,600 -2.5%
Atlanta-Sandy Springs-Marietta GA $129,200 -21.4%
Atlantic City NJ $229,100 -17.8%
Austin-Round Rock TX $184,800 -0.1%
Baltimore-Towson MD $260,100 -5.5%
Barnstable Town MA $325,300 -14.9%
Baton Rouge LA $156,400 -7.8%
Beaumont-Port Arthur TX $132,600 16.7%
Binghamton NY $105,800 -3.7%
Birmingham-Hoover AL $135,400 -13.3%
Bismarck ND $164,300 6.0%
Bloomington-Normal IL $159,300 9.6%
Boise City-Nampa ID $168,800 -14.7%
Boston-Cambridge-Quincy MA-NH** $335,700 -11.8%
Boulder CO $324,400 -12.6%
Bridgeport-Stamford-Norwalk CT $379,700 -17.5%
Buffalo-Niagara Falls NY $106,200 0.8%
Canton-Massillon OH $80,400 -18.0%
Cape Coral-Fort Myers FL $110,900 -50.8%
Cedar Rapids IA $136,900 1.5%
Champaign-Urbana IL $132,000 -8.1%
Charleston WV $124,800 1.5%
Charleston-North Charleston SC $193,800 -5.2%
Charlotte-Gastonia-Concord NC-SC $186,300 -9.0%
Chattanooga TN-GA $123,800 1.8%
Chicago-Naperville-Joliet IL $217,800 -16.6%
Cincinnati-Middletown OH-KY-IN $116,000 -12.4%
Cleveland-Elyria-Mentor OH $88,300 -25.5%
Colordo Springs CO $187,000 -11.2%
Columbia MO $138,100 -4.2%
Columbia SC $139,200 -3.9%
Columbus OH $126,500 -7.8%
Corpus Christi TX $134,000 -2.8%
Cumberland MD-WV $96,900 -16.9%
Dallas-Fort Worth-Arlington TX $138,000 -4.8%
Danville IL N/A N/A
Davenport-Moline-Rock Island IA-IL $98,400 -3.6%
Dayton OH $87,800 -17.6%
Decatur IL $79,300 5.9%
Deltona-Daytona Beach-Ormond Beach FL $143,600 -20.7%
Denver-Aurora CO $200,800 -12.7%
Des Moines IA $149,700 -1.9%
Detroit-Warren-Livonia MI N/A N/A
Dover DE $212,500 6.5%
Durham NC $165,600 -7.0%
El Paso TX $140,700 5.3%
Elmira NY $80,900 -0.4%
Erie PA $95,200 -3.4%
Eugene-Springfield OR $212,800 -10.4%
Fargo ND-MN $140,100 -1.1%
Farmington NM $185,000 -0.8%
Florence SC $119,100 1.9%
Ft. Wayne IN $88,600 -2.5%
Gainesville FL $174,000 -11.5%
Gary-Hammond IN $115,100 -7.6%
Glens Falls NY $147,600 -9.9%
Grand Rapids MI $80,500 -35.2%
Green Bay WI $146,600 -1.5%
Greensboro-High Point NC $135,400 -10.2%
Greenville SC $146,900 -5.5%
Gulfport-Biloxi MS $129,500 -13.9%
Hagerstown-Martinsburg MD-WV $171,400 -10.8%
Hartford-West Hartford-East Hartford CT $233,700 -9.4%
Honolulu HI $610,000 -2.4%
Houston-Baytown-Sugar Land TX $142,100 -5.5%
Indianapolis IN $100,200 -12.1%
Jackson MS $126,600 4.7%
Jacksonville FL $160,700 -9.5%
Kalamazoo-Portage MI N/A N/A
Kankakee-Bradley IL $125,600 1.0%
Kansas City MO-KS $131,000 -11.6%
Kennewick-Richland-Pasco WA $165,900 -3.8%
Kingston NY $224,000 -9.0%
Knoxville TN $141,700 -8.6%
Lansing-E.Lansing MI $80,000 -27.0%
Las Vegas-Paradise NV $181,700 -33.6%
Lexington-Fayette KY $138,200 -3.3%
Lincoln NE $133,100 -3.6%
Little Rock-N. Little Rock AR $125,200 -1.8%
Los Angeles-Long Beach-Santa Ana CA $354,300 -31.4%
Louisville KY-IN $124,000 -6.8%
Madison WI $227,000 -0.003
Manchester-Nashua NH $238,600 N/A
Memphis TN-MS-AR $100,200 -19.4%
Miami-Fort Lauderdale-Miami Beach FL $234,200 -32.3%
Milwaukee-Waukesha-West Allis WI $194,900 -11.2%
Minneapolis-St. Paul-Bloomington MN-WI $188,600 -13.2%
Mobile AL $125,000 -9.0%
Montgomery AL $126,300 -11.9%
NY: Edison NJ $343,600 -7.2%
NY: Nassau-Suffolk NY $381,300 -17.4%
NY: Newark-Union NJ-PA $373,600 -14.3%
Nashville-Davidson--Murfreesboro TN N/A N/A
New Haven-Milford CT $240,400 -10.6%
New Orleans-Metairie-Kenner LA $154,900 -2.1%
New York-Northern New Jersey-Long Island NY-NJ-PA $390,400 -14.6%
New York-Wayne-White Plains NY-NJ $458,600 -11.7%
Norwich-New London CT $223,100 -11.6%
Ocala FL $121,700 -21.5%
Oklahoma City OK $124,200 -7.9%
Omaha NE-IA $129,700 -4.4%
Orlando FL $175,200 -27.1%
Palm Bay-Melbourne-Titusville FL $123,600 -18.3%
Pensacola-Ferry Pass-Brent FL $151,700 -3.0%
Peoria IL $117,200 -1.1%
Philadelphia-Camden-Wilmington PA-NJ-DE-MD $212,500 -6.3%
Phoenix-Mesa-Scottsdale AZ $155,900 -35.5%
Pittsburgh PA $109,100 -6.7%
Pittsfield MA $206,000 1.7%
Portland-South Portland-Biddeford ME $214,500 -11.4%
Portland-Vancouver-Beaverton OR-WA $264,500 -9.0%
Providence-New Bedford-Fall River RI-MA $224,500 -17.8%
Raleigh-Cary NC $230,900 -2.0%
Reading PA $155,100 1.0%
Reno-Sparks NV $231,200 -23.3%
Richmond VA $199,400 -11.7%
Riverside-San Bernardino-Ontario CA $201,300 -40.8%
Rochester NY $112,500 -6.9%
Rockford IL $111,500 -1.5%
Sacramento--Arden-Arcade--Roseville CA $187,900 -36.9%
Saginaw-Saginaw Township North MI $43,900 -41.4%
Saint Louis MO-IL $113,700 -14.8%
Salem OR $198,000 -14.4%
Salt Lake City UT $225,400 -1.6%
San Antonio TX $143,400 -5.5%
San Diego-Carlsbad-San Marcos CA $332,800 -36.4%
San Francisco-Oakland-Fremont CA $487,100 -37.4%
San Jose-Sunnyvale-Santa Clara CA $525,000 -37.7%
Sarasota-Bradenton-Venice FL $178,100 -35.0%
Seattle-Tacoma-Bellevue WA $325,900 -13.7%
Shreveport-Bossier City LA $139,200 2.8%
Sioux Falls SD $142,400 Unch
South Bend-Mishawaka IN $80,800 -6.4%
Spartanburg SC $120,800 -0.8%
Spokane WA $185,900 -4.2%
Springfield IL $96,700 -11.0%
Springfield MA $186,400 -9.7%
Springfield MO $117,100 -3.0%
Syracuse NY $114,100 -9.7%
Tallahassee FL $150,100 -17.0%
Tampa-St.Petersburg-Clearwater FL $151,500 -24.9%
Toledo OH $75,600 -27.3%
Topeka KS $104,800 -6.7%
Trenton-Ewing NJ $247,800 -19.2%
Tucson AZ $185,900 -21.2%
Tulsa OK N/A N/A
Virginia Beach-Norfolk-Newport News VA-NC $222,000 -5.9%
Washington-Arlington-Alexandria DC-VA-MD-WV $295,100 -26.2%
Waterloo/Cedar Falls IA $105,200 -8.8%
Wichita KS $118,200 3.9%
Worcester MA $217,000 -16.2%
Yakima WA $145,900 -14.4%
Youngstown-Warren-Boardman OH-PA $61,700 -0.15%
U.S.   $180,100 -12.4%
NE   $248,800 -4.7%
MW   $139,500 -10.6%
SO   $158,300 -7.5%
WE   $243,200 -25.1%
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.
They include the named central city and surrounding areas. N/A Not Available p Preliminary r Revised
© 2008 National Association of REALTORS®
Metro Area State Median Price
4Q 2008
% Change
(1-yr)
Albuquerque NM $158,900 8.6%
Atlanta-Sandy Springs-Marietta GA N/A N/A
Austin-Round Rock TX $155,100 -10.5%
Baltimore-Towson MD $222,800 -5.4%
Bismarck ND $134,900 8.0%
Boston-Cambridge-Quincy MA-NH $272,900 -8.1%
Boulder CO $204,800 -3.7%
Bridgeport-Stamford-Norwalk CT $232,900 -10.5%
Cape Coral-Fort Myers FL $169,900 -16.0%
Chicago-Naperville-Joliet IL $209,400 -11.4%
Cincinnati-Middletown OH-KY-IN $122,500 -2.5%
Cleveland-Elyria-Mentor OH N/A N/A
Colorado Springs CO $140,000 -3.2%
Columbus OH $118,900 -9.9%
Dallas-Fort Worth-Arlington TX $149,500 14.1%
Greensboro-High Point NC $108,000 -7.5%
Hartford-West Hartford-East Hartford CT $163,800 -9.3%
Honolulu HI $315,600 -1.4%
Houston-Baytown-Sugar Land TX $124,500 -8.1%
Indianapolis IN $117,500 0.7%
Jacksonville FL $126,200 -11.6%
Knoxville TN $145,900 -9.3%
Las Vegas-Paradise NV $91,200 -48.9%
Los Angeles-Long Beach-Santa Ana CA $240,600 -33.8%
Louisville KY-IN $116,100 -7.5%
Madison WI $163,900 -8.7%
Manchester-Nashua NH $174,900 N/A
Miami-Fort Lauderdale-Miami Beach FL $132,900 -31.6%
Milwaukee-Waukesha-West Allis WI $172,400 0.2%
New Haven-Milford CT $169,600 -6.2%
New Orleans-Metairie-Kenner LA $171,500 -1.0%
Norwich-New London CT $160,000 -12.4%
New York-Wayne-White Plains NY-NJ $292,600 -5.9%
NY: Newark-Union NJ-PA $279,300 -11.4%
NY:Edison NJ $262,800 -4.2%
NY:Nassau-Suffolk NY $231,800 -7.0%
Palm Bay-Melbourne-Titusville FL $88,500 -29.0%
Philadelphia-Camden-Wilmington PA-NJ-DE-MD $210,200 10.2%
Phoenix-Mesa-Scottsdale AZ $138,900 -24.1%
Portland-South Portland-Biddeford ME $199,200 -1.0%
Portland-Vancouver-Beaverton OR-WA $194,400 -6.2%
Providence-New Bedford-Fall River RI-MA $202,800 -8.8%
Reno-Sparks NV $114,100 -39.0%
Richmond VA $173,300 -7.7%
Riverside-San Bernardino-Ontario CA N/A N/A
Rochester NY $109,100 -11.1%
Sacramento--Arden-Arcade--Roseville CA $94,700 -55.8%
Salt Lake City UT $156,300 -4.3%
San Diego-Carlsbad-San Marcos CA $190,100 -41.9%
San Francisco-Oakland-Fremont CA $391,900 -34.2%
Sarasota-Bradenton-Venice FL $216,600 -20.4%
Springfield MA $149,500 -2.3%
Syracuse NY N/A N/A
Tampa-St. Petersburg-Clearwater FL $125,000 -27.1%
Toledo OH $153,900 11.4%
Trenton-Ewing NJ $219,100 -10.3%
Tucson AZ $115,500 -9.8%
Virginia Beach-Norfolk-Newport News VA-NC $168,600 -3.9%
Washington-Arlington-Alexandria DC-VA-MD-WV $242,100 -16.0%
Wichita KS $111,400 1.4%
Worcester MA $153,500 -27.9%
U.S.   $186,000 -15.8%
NE   $232,200 -6.3%
MW   $173,900 -10.1%
SO   $150,000 -17.0%
WE   $175,800 -30.1%
*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 % Change
(1-yr)
ALABAMA $68,800 -35.1%
ALASKA $20,000 -16.7%
ARIZONA $116,400 42.6%
ARKANSAS $59,200 -20.9%
CALIFORNIA $563,600 84.7%
COLORADO $100,000 -9.7%
CONNECTICUT $43,200 -20.6%
DELAWARE $11,600 -14.7%
District of Columbia $6,800 -15.0%
FLORIDA $273,200 12.5%
GEORGIA $168,400 -9.9%
HAWAII $16,800 -30.0%
IDAHO $30,900 -21.8%
ILLINOIS $165,600 -22.8%
INDIANA $105,200 -19.8%
IOWA $57,200 -5.9%
KANSAS $55,200 -17.9%
KENTUCKY $68,400 -19.0%
LOUISIANA $46,800 -29.1%
MAINE $20,000 -13.8%
MARYLAND $58,400 -14.6%
MASSACHUSETTS $103,200 -6.9%
MICHIGAN $153,600 -12.1%
MINNESOTA $95,600 7.2%
MISSISSIPPI $44,400 -22.9%
MISSOURI $94,000 -13.6%
MONTANA $17,600 -21.4%
NEBRASKA $28,800 -8.9%
NEVADA $80,400 133.7%
NEW HAMPSHIRE $18,400 N/A
NEW JERSEY $101,100 -15.3%
NEW MEXICO $27,200 -20.9%
NEW YORK $237,200 -15.2%
NORTH CAROLINA $121,200 -34.7%
NORTH DAKOTA $11,200 -22.2%
OHIO $217,600 -7.6%
OKLAHOMA $80,800 -16.5%
OREGON $49,200 -8.9%
PENNSYLVANIA $178,800 -9.7%
RHODE ISLAND $12,400 -8.8%
SOUTH CAROLINA $63,200 -31.0%
SOUTH DAKOTA $16,000 -18.4%
TENNESSEE $102,800 -26.1%
TEXAS $421,200 -18.1%
UTAH $26,000 -24.4%
VERMONT $8,400 -34.4%
VIRGINIA $105,200 3.1%
WASHINGTON $76,800 -35.6%
WEST VIRGINIA $22,800 -17.4%
WISCONSIN $79,600 -17.4%
WYOMING $7,200 -14.3%
United States $4,700,000 -5.9%
Northeast $760,000 -13.9%
Midwest $1,040,000 -12.4%
South $1,733,000 -13.4%
West $1,173,000 26.5%
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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