National home prices, driven lower by a flood of foreclosures, plummeted in the third quarter by a record 9% year-over-year, according to a report issued Tuesday.
The median price of a single-family home fell in four out of five states, the National Association of Realtors reported. The national median price was $200,500, down 2.9% from the second quarter of 2008.
A flood of foreclosures has driven home prices down. As many as 40% of all sales made during the three months that ended Sept. 30 were short sales pr properties repossessed by banks. These are eager sellers. The longer the banks hold the vacant homes, the more it costs them in maintenance, taxes and insurance.
“A very large proportion of distressed home sales are taking place at discounted prices compared to more normal conditions a year ago,” said NAR President Charles McMillan, a Dallas real estate broker. “It’s very challenging to understand proper valuation, given the differences between distressed sales and a larger share of traditional homes in sound condition.”
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