Study: Home prices continue to fall

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

There was almost nowhere to hide from falling home prices in 2008.

Prices plunged 12.4 percent nationally during the fourth quarter when compared with a year earlier, according to the National Association of Realtors. The national median existing single-family price is now $180,100.

The sweeping wave of price declines spared few cities and towns nationwide. During the fourth quarter, 134 of 153 U.S. metropolitan areas saw the median price of existing single-family homes decline year over year.

The biggest decline occurred in the Cape Coral-Ft. Myers region of southwest Florida, where prices fell a stunning 50.8 percent during 2008. A home valued at $225,300 in late 2007 was worth $110,900 by the end of 2008.

Two metro areas saw declines of at least 40 percent: Saginaw-Saginaw Township North, Mich. (down 41.4 percent); and Riverside-San Bernardino-Ontario, Calif. (down 40.8 percent).

The top 10 declining markets — all of which fell by at least 35 percent year over year — were:

Top 10 declining metro areas
  • Cape Coral-Ft. Myers, Fla., down 50.8 percent, to $110,900
  • Saginaw-Saginaw Township North, Mich., down 41.4 percent, to $43,900
  • Riverside-San Bernardino-Ontario, Calif., down 40.8 percent, to $201,300
  • San Jose-Sunnyvale-Santa Clara, Calif., down 37.7 percent, to $525,000
  • San Francisco-Oakland-Fremont, Calif., down 37.4 percent, to $487,100
  • Sacramento-Arden-Arcade-Roseville, Calif., down 36.9 percent, to $187,900
  • San Diego-Carlsbad-San Marcos, Calif., down 36.4 percent, to $332,800
  • Phoenix-Mesa-Scottsdale, Ariz., down 35.5 percent, to $155,900
  • Grand Rapids, Mich., down 35.2 percent, to $80,500
  • Sarasota, Bradenton-Venice, Fla., down 35 percent, to $178,100

Regionally, the West suffered the biggest declines in the fourth quarter, with prices falling 25.1 percent year over year. Prices also fell in the Midwest (down 10.6 percent), South (down 7.5 percent) and Northeast (down 4.7 percent).

A handful of cities actually saw housing prices rise in the fourth quarter. Beaumont-Port Arthur, Texas, recorded the biggest gain, with prices up 16.7 percent year over year. The median price for a single family home in the region increased to $132,600.

Other gainers include Bloomington-Normal, Ill. (up 9.6 percent, to $159,300); Dover, Del., (up 6.5 percent, to $212,500); Bismarck, N.D. (up 6 percent, to $164,300); and Decatur, Ill. (up 5.9 percent, to $79,300).

Falling prices, few buyers

Despite falling prices, many home shoppers continued to sit on the sidelines. Just six states recorded an uptick in existing-home sales during the fourth quarter when compared with a year earlier.

States where sales volume fell by at least 30 percent include Washington (down 35.6 percent), Alabama (down 35.1 percent), Vermont (down 34.4 percent), North Carolina (down 34.7 percent), South Carolina (down 31 percent) and Hawaii (down 30 percent).

Many of the sales that did occur involved distressed properties. Foreclosures and short sales accounted for 45 percent of all transactions nationwide during the fourth quarter, up from about 38 percent in the third quarter.

States with large numbers of distressed properties recorded the biggest increase in fourth-quarter sales. Nevada led the pack, with sales up a whopping 133.7 percent.

Following the Silver State were California (up 84.7 percent), Arizona (up 42.6 percent) and Florida (up 12.5 percent).

Nationwide, total existing-home sales of single-family homes and condominiums clocked in at a seasonally adjusted rate of 4.7 million units during the fourth quarter.

Fourth-quarter sales were down 6.4 percent from the 5.02 million units in the third quarter, and off 5.9 percent from the 5 million-unit rate in the last quarter of 2007.

Regionally, sales volume grew by 26.5 percent in the West, but fell in the Northeast (down 13.9 percent), South (down 13.4 percent) and Midwest (down 12.4 percent).