Home prices continued to fall in most metro areas over the 12 months that ended in September, even as more houses were sold, according to the National Association of Realtors.
Nationally, the median price of a single-family home fell 4.7 percent in the third quarter of 2011, compared to the third quarter of 2010, the Realtors say. Half of the homes sold in the United States cost more than $169,500 from July through September this year, down 4.7 percent from the median price of $177,800 in the third quarter of 2010.
The Realtors count prices on home resales in 150 metropolitan areas from Abilene, Texas, to Youngstown, Ohio, and from Honolulu to Portland, Maine. Prices went up year-over-year in 39 of those metro areas, and fell in the other 111.
While median home values fell in three-fourths of markets, the number of houses sold was up in all 50 states, says Lawrence Yun, the Realtors’ chief economist. Nationally, the sales pace rose 17 percent in the third quarter, compared to the same period a year earlier. “The good news is inventory levels have been trending gradually down,” Yun says.
Prices fell by double-digit percentages in the 10 coldest housing markets, led by Mobile, Ala.
|Mobile, Ala.||-17.7 percent|
|Phoenix-Mesa-Scottsdale, Ariz.||-17.6 percent|
|Allentown-Bethlehem-Easton, Pa.-N.J.||-17.5 percent|
|Salt Lake City||-15.3 percent|
|Gulfport-Biloxi, Miss.||-12.7 percent|
|Miami-Fort Lauderdale-Miami Beach||-12.7 percent|
|Rockford, Ill.||-12.5 percent|
|Virginia Beach-Norfolk-Newport News, Va.-N.C.||-11.6 percent|
|Tucscon, Ariz.||-11.5 percent|
|Akron, Ohio||-11.4 percent|
The markets with the fastest-falling prices include some major metropolitan areas, such as Phoenix, Miami-Fort Lauderdale and Virginia Beach, Va. By contrast, the places where prices are rising tend to be smaller metro areas.
|Grand Rapids, Mich.||23.7 percent|
|South Bend-Mishawaka, Ind.||19.8 percent|
|Palm Bay-Melbourne-Titusville, Fla.||17.7 percent|
|Youngstown-Warren-Boardman, Ohio-Pa.||13.1 percent|
|Green Bay, Wis.||12.6 percent|
|Canton-Massillon, Ohio||11.6 percent|
|Peoria, Ill.||11.1 percent|
|Binghamton, N.Y.||10.6 percent|
|Jackson, Miss.||7.6 percent|
|Spartanburg, S.C.||7.4 percent|
Yun says about 30 percent of home sales in the third quarter were “distressed” — that is, they were short sales or foreclosures. These homes typically sell at about a 20 percent discount, Yun says.
Housing economists say homes have become more affordable in the past few years, but they say too many would-be buyers can’t take advantage of the improved affordability.
“Many households cannot finance first-time or trade-up home purchases to take advantage of lower home prices because of much stricter mortgage lending standards,” says David Stiff, chief economist for Fiserv, a financial services tech company that issues the Fiserv Case-Shiller home price indexes. “But even households with access to mortgage credit are hesitant to buy homes while job growth is weak and consumer confidence is low.”
Yun says mortgage lending standards are “unnecessarily restrictive,” and says investors are taking advantage of tight lending conditions by “paying cash for undervalued homes.”
Ron Phipps, president of the National Association of Realtors, says: “For people with secure jobs, good credit and long-term plans, today’s conditions will be remembered as a golden opportunity to enter the housing market.”
Stiff says he expects home prices to stabilize next year as homebuyers become more confident. But he doesn’t expect a rapid rebound in home prices, because there are so many foreclosed homes on the market.