Thread: Housing Prices Tumble in Two-Thirds of U.S. Cities (Update3)

Housing Prices Tumble in Two-Thirds of U.S. Cities (Update3)

By Kathleen M. Howley

May 13 (Bloomberg) -- The median price for a single-family home in the U.S. dropped 7.7 percent in the first quarter, the biggest decline in at least 29 years, as values tumbled in two- thirds of U.S. cities, the National Association of Realtors said.

The median, the point at which half the homes sold for more and half for less, was $196,300, down from $212,600 a year ago, the largest decline in records going back to 1979. Sales of single-family houses and condominiums fell 22 percent to 4.95 million at an annualized pace, the slowest in a decade, the Chicago-based group said in separate reports today.

Home prices are falling as foreclosed properties reduce the value of nearby real estate, said Lawrence Yun, the realtor group's chief economist. U.S. foreclosure filings more than doubled in the first quarter from a year earlier, Irvine, California-based RealtyTrac Inc., a seller of foreclosure data, said in a study released April 29.

``Foreclosures throw more supply on the market and accelerate the price declines that have already taken place,'' said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.

Homeowners who live near a house repossessed by a lender will see their property values drop an average of $5,000, according to the Center for Responsible Lending. Nationally, foreclosures will result in $202 billion of lost real estate value, the Durham, North Carolina-based group said.

Price Declines

There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report. At the current sales pace, that represented 9.9 months' worth, up from 9.6 months' worth at the end of February.

``Prices have fallen in neighborhoods with a wide prevalence of subprime loans, because more foreclosed properties are being sold at discounted prices,'' Yun said in today's report.

The median price for a single-family home fell in 100 of 149 metropolitan areas studied by the Realtors group. The biggest declines were in Sacramento, the capital of California, which had a 29 percent drop, followed by the metropolitan area around Riverside and San Bernardino, with a decline of 28 percent.

The Biggest Losers

Lansing, Michigan, had a 27 percent drop in prices, and San Diego tumbled 23 percent, according to the report.

Home sales fell in 46 states and the District of Columbia in the quarter. Three states had increases and one, New Hampshire, did not have data available, the trade group said.

Maryland had the biggest U.S. sales decline, at 39 percent. The District of Columbia tumbled 35 percent, Utah fell 34 percent, and California dropped 33 percent, according to the report.

To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

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They can't keep going up forever. If they did, it would take millions to buy a shack. All bubbles burst sooner or later. Home prices in some areas were increasing at absurd levels, pricing many people out of the market. Speculators were buying up condos before the ground was even broken. Like so many of the Nation's problems, there is the illegal alien link and the idiot banks.

The upside of all this, many people now will be able to enter into home ownership.

I think that this (economic downturn) is done intentionally to ensure the opposite party gets in power.

This was done in the 70s to get Carter out. It was done in the early nineties to get Clinton in, and they are doing it now to ensure a democrat gets in.

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