NAR: Foreclosures, Short Sales Weigh Down Median Home Prices

irst-time buyers accounting for half of all purchases during the first quarter, 134 out of 152 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the first quarter of 2008, according to a survey conducted by the National Association of Realtors (NAR). Eighteen metros had price gains, the trade group says. Many buyers sought deeply discounted distressed sales – foreclosures and short sales – which accounted for nearly half of transactions in the first quarter and weighed down median home prices in most markets. The national median existing single-family price was $169,000, which is 13.8% below the average price in the first quarter of 2008 when conditions were closer to normal. Distressed homes typically are selling for 20% less than traditional homes and are downwardly skewing median prices, NAR says. "Close to 455,000 buyers purchased their first home during the first quarter, and those are likely just the first wave of new buyers coming into the market – they're critical for a housing recovery," says NAR's chief economist, Lawrence Yun. "Housing affordability conditions are at record high levels, and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas." Total state existing-home sales, including single-family homes and condos, were at a seasonally adjusted annual rate of 4.59 million units in the first quarter, down 3.2% from 4.74 million units in the fourth quarter, and 6.8% below the 4.93 million-unit pace in the first quarter of 2008. SOUR

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