Foreclosed Houses for Sale Drove Home Price Declines
The pace of home price declines across the county increased in the second quarter, as foreclosed houses for sale continued to push down home prices, based on a report from the National Association of Realtors. Home prices declined by a record rate of 15.6 percent from prices in the second quarter last year.
The median price of a previously owned single-family detached home declined to $174,100, the biggest drop rate since 1979 based on NAR sales records.
Meanwhile, total home sales increased by 3.8 percent to an adjusted yearly rate of 4.76 million compared to sales in the first quarter, but decreased by 2.9 percent compared to the second quarter last year.
In 129 out of the 155 metro areas surveyed, home prices decreased and in 39 states, home sales increased compared to the first quarter.
According to IHS Global Insight economist Patrick Newport, home sales across the country are showing signs of recovery.
However, other economists like Scott Anderson of Wells Fargo said home prices have not bottomed out yet. He contended that there are volumes of inventories of homes for sale that are being held because of various reasons.
Housing analysts said home prices are still falling despite positive forecasts by a group of economists surveyed. Based on the median of over 50 economic forecasts gathered by Bloomberg, the national economy will grow by two percent or more in four consecutive quarters through June next year.
In the Northeast, the median home price for existing homes declined by 9.7 percent to $246,000 in the second quarter compared to last year’s second quarter. Home sales increased by 15 percent compared to the first quarter but decreased by 8.4 percent compared to last year’s second quarter.
In the Midwestern states, the median home price declined by 8.6 percent to $146,800 compared to last year’s second quarter.
In the South, the home price dropped to $158,600, marking a drop of 10.3 percent. In the West, the median home prices dropped to $212,600, marking a significant 26.6-percent decrease.
The biggest price declines occurred in the Fort Myers-Cape Coral metro area, where the median sales price dropped to $84,000, a staggering drop of 53 percent from last year’s second quarter.
The other metro areas with the biggest declines are the Las Vegas area and the metro area comprised by San Bernardino, Riverside and Ontario.
According to a NAR study, distressed sales reduce the value of every nearby house by an average of $8,667 as appraisal rules are applied.
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