Home prices fell in a record four-fifths of U.S. cities in the third quarter as cheap foreclosed homes flooded the market and the housing industry's decline spread to most corners of the country, a realtors' organization reported Tuesday. Among 152 metropolitan areas included in the National Association of Realtors (NAR) survey, 120 posted declines in median home sales prices compared with a year ago. Nationally, sales fell by nearly 8 percent in the third quarter compared with the same period last year. Sales of foreclosed homes and other distressed properties comprised about 40 percent of transactions in the July-September period, lowering the median price by 9 percent from a year ago. Sales fell in all but four states in the NAR report. The exceptions were Nevada, California, Arizona, and Virginia, where buyers have been able to purchase foreclosed homes at cheap prices. “A very large proportion of distressed home sales are taking place at discounted prices compared to more normal conditions a year ago,” NAR president Charles McMillan said in a statement. A combination of strict lending standards, falling home values, and a slowing economy is hurting the housing industry. By the end of the year, more than 1 million bank-owned properties will have been put up for sale, representing about one-third of all properties on the market. Meanwhile, many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. Accelerating unemployment is likely to put further downward pressure on home prices.
