Home Prices Fall in 77 U.S. Metro Areas, Realtors Say
By Bob Ivry
Home prices fell in a record number of U.S. metropolitan areas in the fourth quarter, according to a report released today by the National Association of Realtors in Chicago.
The median sale price of a U.S. home dropped 5.8 percent to $206,200 in the last three months of 2007 from $219,000 in the same period of 2006, the realtors group said today. Prices fell in 77 of 150 metropolitan areas, the most since the group began tracking values in 1979. The decline was 10 percent or more in 16 metro areas, the association said.
Prospective homeowners had a tougher time getting mortgages in 2007 as lenders tightened standards amid rising foreclosures, and made 14 percent fewer loans and 28 percent fewer jumbo loans, which cover up to $417,000 of a home's value. Prices have fallen more than 10 percent since their July 2006 peak in the worst U.S. housing slump in 26 years.
``The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,'' said Lawrence Yun, the association's chief economist. ``Higher ratios of sales for more moderately priced homes are naturally dampening the national median price as well as the data for some of the more expensive markets.''
The economic stimulus package signed by President George W. Bush this week will raise the jumbo loan limit to $729,750.
All five regions of the U.S. experienced price declines, led by the West with 8.7 percent. The drop was smallest in the Midwest, at 3.2 percent, the realtors group said.
The metropolitan area with the biggest decrease was Lansing- East Lansing, Michigan, which had a 19 percent decline. Prices fell 18.5 percent in the Sacramento, California, region and 17 percent in Riverside and San Bernardino, California -- the so-called Inland Empire -- and in the Jackson, Mississippi, region, the group said.
Of the 73 areas with price increases, 11 had gains of 10 percent of more. The greatest was in the Cumberland, Maryland, area, at 19 percent. The areas around Yakima, Washington, and Binghamton, New York, had 18 percent and 15 percent jumps respectively.
Prices in the Atlantic City, New Jersey, area rose 11 percent in the quarter, according to the association.
Median home prices ranged from $72,600 in the Youngstown, Ohio, region to nearly 12 times that amount in the Silicon Valley area of California, where the median price was $845,300, the group said.
In the fourth quarter of 2006, home prices fell in 73 of 149 metropolitan areas, said association spokesman Walter Molony.
U.S. home sales fell 21 percent in the last three months of 2007, according to the report. The West saw the biggest drop, with 28 percent. Nevada, Wyoming, New Mexico, Arizona, Oregon and Utah all had sales declines of more than 30 percent, the realtors said.