Home prices fell a record 12.4% during fiscal 2008, the largest annual decline since the National Association of Realtors [NAR] began keeping records in house price cycles in states and metropolitan areas dating back to 1979.
In the fourth quarter-YoY basis, 134 out of 153 metropolitan areas showed declines in median existing single-family home prices. The median price for a home sold during the last quarter of 2008 fell to $180.000 from $206.000 in fiscal ’07. Despite the price-deterioration factor there was some positivity in today’s report ; at least one area remained unchanged price-wise while 18 metros reported price gains. The largest single-family home price increase in the 4Q’08 that bucked the national trend was recorded in the Beaumont-Port Arthur area of Texas, where the median price of $132,600 rose 16.7% from a year ago. Next was the Bloomington-Normal, Ill., area at $159,300, up 9.6% from the 4Q of 2007, followed by Dover, Del, where the median price increased 6.5% to $212,500.
In the sales front: the largest gains in the 4Q’YoY was in Nevada, up 133.7%, followed by California which rose 84.7%, Arizona, up 42.6%, and Florida with a 12.5% increase.
The report notes however, that increases in delinquencies observed to date continue to mount. Distressed sales accounted for 45% of all transactions in the 4Q’08, which was the main contributing factor in pushing home prices down. NAR President Charles McMillan, said that “distressed home sales have risen from about 38% of transactions in the third quarter……meaning people are slowly absorbing excess inventory.”
As house prices continue to break support levels, and as they get constantly affected by negative changes in economic fundamentals, many metropolitan areas face the possibility of further price deterioration. Lawrence Yun, NAR chief economist, said the market is clearly depressed from the massive number of job losses and consumer concerns about the economy. However, he also stressed that if “housing provisions in the economic stimulus package are quickly enacted…..we could see a quick lift in home sales for the critical spring home-buying season.”
Areas with the steepest declines in single-family home prices included: Cape Coral-Ft. Myers, Fla., where there was a price-meltdown of nearly 51% for the year, to $110,900 from $225,300. Saginaw, Mich., prices fell also precipitously posting a 41.4% downside; Riverside-San Bernardino, Calif., prices dropped 40.8%; and San Jose, Calif., prices declined 37.7%.
The condo sector – covering changes in 56 metro areas – showed the national median existing-condo price was $186,000 in the 4Q’08, down 15.8% YoY basis.