Home prices fell 12.4% during the fourth quarter of 2008, the largest year-over-year decline since the National Association of Realtors began keeping comprehensive records in 1979. The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.
Distressed properties, the foreclosures and short sales that invaded the market represented 45% of all deals. That has driven sales volume up in Nevada, California and other states hit hard by foreclosures, but these heavily discounted homes have also pushed median prices down.
“People are responding to discounted prices and are slowly absorbing the excess inventory,” said NAR President Charles McMillan. “Buyers clearly see value in today’s pricing.”
The vast majority of metropolitan areas, 134 out of 153, recorded price declines compared with the last quarter of 2007.
“Home markets are weak just about everywhere,” said Pat Newport, an analyst with HIS Global Insight, “but in a few states, distressed sales are driving transactions.”