Nationwide home prices were down slightly in the first quarter when compared to the same time last year, according to the National Association of Realtors’ latest quarterly survey.

While home prices are still falling in many markets severely damaged by the housing crash, the declines appear to be leveling off. Other markets less deeply involved in the housing boom are on the rise.

Overall, the median price of a U.S. home fell 0.7 percent compared to the first quarter of 2009, from $167,300 to $166,100.

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Regionally, the Northeast posted the biggest gain, rising 9 percent year over year. The South also saw gains, with values rising 1.1 percent overall.

After a stronger showing in the last NAR survey, the Midwest lost ground, with median home prices there falling 0.8 percent. The recent trend of steep declines in the West continued, with median home prices falling 8.3 percent year over year.

Substantial drops continued in many once-overheated markets, but the rate of decline appeared to be slowing. Las Vegas was down 11.8 percent in the current survey, but even that dismal number is a far cry from the 23.3 percent decline the area suffered in the last survey.

Orlando, Fla., another housing-bust epicenter, lost 15 percent in the current survey, an improvement over the 20.3 percent year-over-year decline the city posted in last quarter’s survey.

Improving picture
Price declines appear to be slowing in many hard-hit markets.
Market Q3 2009 Q4 2009 Q1 2010
Cape Coral-Ft. Myers, Fla. -40 percent -18.8 percent -1.0 percent
Las Vegas -34.5 percent -23.3 percent -11.8 percent
Orlando, Fla. -26.0 percent -20.3 percent -15.0 percent
Riverside-San Bernadino-Ontario, Calif. -26.0 percent -12.2 percent 4.6 percent
Miami-Ft. Lauderdale, Fla. -24.6 percent -14.9 percent -6.0 percent

But other markets once cited as cautionary tales for real estate speculation are emerging from ruins of the housing boom. Los Angeles-Long Beach-Santa Ana, Calif., posted a gain of 9.2 percent, a big improvement over the 11.5 percent annualized drop (third quarter 2009) and 0.5 percent drop (fourth quarter 2009) recorded in the previous two surveys.

Sarasota-Bradenton-Venice, Fla., another housing bust poster child, went from a 22 percent decline in the third quarter of last year to an 8 percent gain in the current survey.

“This flattening in home prices is something we’ve been seeing in all of the home price measures lately, and quite clearly in this metro area price report,” said Lawrence Yun, NAR chief economist, in a statement. “The tax credit has been very effective in drawing down excess inventory, with about 1 million additional sales resulting directly from the stimulus.”

The last days of the big homebuyer tax credit may also account for big price gains in some markets that are reminiscent of the go-go years of the real estate boom. Saginaw-Saginaw Township North, Mich., and Akron, Ohio, posted massive year-over-year gains of 100.7 percent and 90.2 percent, respectively.

The tax credit probably also had something to do with home sales being up substantially over this time last year, according to the NAR. Existing home sales showed year-over-year gains in 44 states and the District of Columbia and rose 11.4 percent nationwide.

Still, the news wasn’t all good. Twelve major markets showed double-digit price declines in the survey.

Many prospective homebuyers are having trouble finding financing from banks still gun-shy about lending in many markets.

“Eleven percent of Realtors in the first quarter report a contract was canceled because an appraisal came in less than the price negotiated between a buyer and seller, and another 16 percent report a contract had to be renegotiated because of a low appraisal,” NAR President Vicki Cox Golder said in a statement. “As a result, the housing recovery isn’t as strong as it could be.”