Prices of existing U.S. single-family homes fell a record 12.4 percent in the fourth quarter from a year earlier to the lowest level since 2003 as low-cost foreclosures flooded the market, the National Association of Realtors (NAR) said Thursday. The NAR said home prices fell in nearly nine out of 10 U.S. cities in the last three months of 2008 compared to a year earlier. Distressed sales, which include foreclosures, accounted for 45 percent of transactions in the October-December period. While national median home prices fell more than 12 percent, price declines of 30 percent or more were seen in much of California and parts of Michigan, Florida, Arizona, and Nevada. The biggest decline, of more than 50 percent, was in Fort Myers, Florida. President Barack Obama visited Fort Myers earlier this week to campaign for his economic stimulus plan, which lawmakers are trying to finalize for his signature by Friday. The states in which sales rose—California, Florida, Virginia, Arizona, Minnesota, and Nevada—are places where buyers have been able to purchase foreclosed homes at a bargain. Sales more than doubled in Nevada, rose 85 percent in California, and nearly 43 percent in Arizona. “We see a pattern of strong sales gains, particularly in lower price homes, in areas with price declines resulting from foreclosures,” NAR chief economist Lawrence Yun said in a statement. NAR president Charles McMillan said homes and neighborhoods minimally impacted by foreclosures have moderate price changes. “Distressed home sales have risen from about 38 percent of transactions in the third quarter, meaning people are responding to discounted prices and are slowly absorbing the excess inventory,” he said in a statement. “Buyers clearly see value in today's pricing.” Total existing-home sales were at an annual rate of 4.70 million units in the fourth quarter, down 6.4 percent from 5.02 million units in the third quarter, and are 5.9 percent below the 5 million-unit pace in the fourth quarter of 2007. Yun said the market clearly is depressed from job losses and consumer worries about the economy. “Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said.
