WASHINGTON Median home prices fell in more than three-quarters of U.S. cities in the second quarter, the latest sign of the breadth of the housing market decline, according to new data Thursday.
Nevertheless, home sales rose in areas where the market is flooded with foreclosures, indicating that borrowers are taking advantage of steep discounts.
Nevada and California, battered by a housing market bust, were the only states to show sales gains in the second quarter compared with a year earlier, according to a report by the National Association of Realtors.
Sales were up 18 percent in Nevada compared with last year, after median prices fell by nearly 24 percent in the Las Vegas area. Sales in California were up 3.7 percent. Prices in Los Angeles, Riverside and Sacramento have plunged by 30 percent or more, according to the NAR's data.
Nationally, sales fell by 16.3 percent in the second quarter compared with the same period a year ago.
In recent months, the biggest home sales gains "have been in some of the markets with the steepest and fastest price drops," said Lawrence Yun, the trade group's chief economist. "Buyers in these areas are responding to deeply discounted home prices."
The Realtors group said median prices for existing single-family homes dropped in 115 of 150 metropolitan areas in the April-June period, while 35 metro areas saw prices increase.
Among the bright spots, prices of homes sold rose by more than 7 percent in Yakima, Wash., Binghamton, N.Y., Amarillo, Texas and Charleston, W.Va.
Nationally, the median home price the point where half the homes sold for more and half for less fell to $206,500 in the second quarter, down by 7.6 percent from the same period a year ago, when the median sales price was $223,500.
As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically.
Foreclosure listing service RealtyTrac said that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.
Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.
Christopher Thornberg, a principal with Beacon Economics in Los Angeles, said the mortgage crisis has moved far beyond the subprime loans that started to go bust last year, especially as borrowers start to default as a result of the job losses. He said, "It's every part of the housing market that's getting whacked right now."