More than 75 percent of metropolitan statistical areas had real estate price declines in the second quarter, according to the National Association of Realtors. The remaining 35 of 150 saw price increases in median single-family home sale prices.
Home prices in 13 states rose from the first quarter, according to NAR.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said foreclosures are distorting the price data.
“In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,” Gaylord said. “Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising–today’s buyers are very well positioned to build wealth over time.”
Total existing home sales fell 0.8 percent from the first quarter of 2008. And compared to second quarter 2007, home sales fell 16.3 percent.
Still in areas where home prices fell significantly, consumers are buying homes.
Lawrence Yun NAR chief economist, said a clear cause-and-effect response has developed in the housing market.
“The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops,” Yun said. Compared with the first quarter, existing-home sales increased 25.8 percent in California, 25.0 percent in Nevada, 20.5 percent in Arizona and 10.1 percent in Florida. “Buyers in these areas are responding to deeply discounted home prices.”
Aug. 20, 2008.