Home Prices Fall in Half of Major Metros on Post-Credit Sales Declines

Residential property values dropped in 76 of the 155 metropolitan areas tracked by the ""National Association of Realtors"":http://www.realtor.org (NAR) during the third quarter, following a sharp decline in home sales after the federal government's homebuyer tax credit passed.

[IMAGE]

Seventy-seven metro areas held their ground in the post-tax credit months and recorded higher median prices on existing single-family homes compared to the third quarter of 2009, while two metros saw no change in median home prices from a year ago.

NAR says that the latest numbers point to an improving value picture when you consider that this time last year, only 30 metropolitan areas tracked by the trade group experienced annual price gains.

According to ""NAR's quarterly study"":http://www.realtor.org/research/research/metroprice of metro home prices, the national median existing single-family price was little changed in the third quarter at $177,900, down 0.2 percent from $178,200 in the third quarter of 2009.

[COLUMN_BREAK]

Lawrence Yun, NAR's chief economist, says relatively flat home prices have been the hallmark of the 2010 housing market. ""Even with swings in home sales, prices this year have been changing very little from year-ago readings. Areas with some larger swings in home price reflect the degree of distressed sales in those markets,"" he said.

Yun notes that there are considerable local market differences with prices rising in job-creating regions like the Washington, D.C. area, the Dakotas, and Texas, and also in markets recovering from over-correction such as California's coastal cities.

Yun added that there are additional indicators for home price stabilization. ""A recent surge in commodity prices, along with the fact that the cost of constructing a new home exceeds the value of existing homes in many markets, bode well for continuing home price stabilization,"" he said.

As expected, total existing-home sales, including single-family and condo, fell 25.3 percent to a seasonally adjusted annual rate of 4.16 million in the third quarter, according to NAR. That's down significantly from the second quarter surge, a 5.57 million-unit sales pace driven by the homebuyer tax credit.

Nationally, distressed homes, which are typically sold at a discount, accounted for 34 percent of the nation's third-quarter sales, up from 30 percent a year ago, according to NAR's market analysis.

The trade group says from January through September of this year, a total of 3.79 million existing-homes were sold, essentially unchanged from 3.77 million at the same point in 2009.