Home prices fell in nearly nine out of every 10 U.S. cities in the first quarter of this year as first-time buyers looking for bargains dominated the market.
While sales rose in six states among the hardest hit by the housing slump, analysts said the nascent signs of recovery in the market could be short-lived if employers continue to lay off workers in bulk.
The National Association of Realtors said Tuesday that median sales prices of existing homes declined in 134 out of 152 metropolitan areas compared with the same period a year ago. Prices rose in the other 18 cities.
Nationwide, sales of foreclosures and other distressed properties made up about half of the market. Overall, sales dipped 6.8 percent from the year-ago period.
“I think we’re near a bottom, but we’re not there yet,” said David Resler, chief economist at Nomura Securities. While prices could hit bottom as soon as this summer, he said, they are likely to remain stable and start edging higher slowly.
“We are finally beginning to see the seeds of a bottoming” in housing, former Federal Reserve Chairman Alan Greenspan said at the Realtors’ midyear conference in Washington, though he cited the massive inventory of unsold properties as a big concern.
At the conference, discussion focused of how to turn around the beleaguered market. Real estate agents hope the $8,000 tax credit for first-time buyers included in the economic stimulus package signed by President Barack Obama earlier this year will boost sales.
But in high-priced areas such as New York City, it doesn’t make much of a difference for buyers. “It’s not really a major motivator for people,” said Robert Oppenheimer, a Re/Max broker in nearby Englewood Cliffs, N.J. “It’s almost an afterthought.”
Many in the real estate industry say that Congress should do more to stimulate housing demand.
“They need to go further,” said Robert Sibcy, president of Sibcy Cline Inc., a Cincinnati real estate agency, drawing applause from a crowd of real estate agents. “They need to do it for all buyers.”
Housing and Urban Development Secretary Shaun Donovan said the Federal Housing Administration soon will allow its borrowers to get short-term loans and turn the $8,000 tax credit into a down payment.
The tax credit, “is not only a tremendous opportunity for first-time home buyers, but also an enormous benefit for communities struggling to deal with an oversupply of housing,” Donovan said, according to prepared remarks.
In the Realtors’ first-quarter report, home sales fell in all but six states — Nevada, California, Arizona, Florida, Virginia and Minnesota — where buyers have been able to snap up foreclosures at a deep discount. Sales more than doubled in Nevada, rose 81 percent in California and grew 50 percent in Arizona — signaling that the worst may be over for those distressed states.
Still, the median sales price nationwide was $169,900, down 13.8 percent from a year ago. The median price is the midpoint, which means half of the homes sold for more and half for less.
The biggest drop, of more than 50 percent, was in Fort Myers, Fla. Prices fell 40 percent or more in Saginaw, Mich.; Akron, Ohio; San Francisco; San Jose, Calif.; Phoenix; Sarasota, Fla. and Riverside, Calif.
The biggest price gain, of more than 21 percent, was in Cumberland, Md., about 120 miles west of Baltimore.
“It’s been more of a steady ride than other jurisdictions,” said Jeffrey Repp, Cumberland’s city administrator. “Unfortunately we didn’t experience the peaks during the early parts of the 2000s, but we haven’t experienced the valleys that have taken place since.”