From CNN:
Single-family home prices dropped 7.7% in the first quarter in the largest
year-over-year decline since the National Association of Realtors began
reporting prices in 1982.
The median sales price fell to $196,300, down 4.8% compared with the last three months of 2007.
Lawrence Yun, the chief economist of NAR, attributed much of the record decline to liquidity problems dragging down high-priced markets.
and:
Hurting home prices were big rises in foreclosure rates over the past 12 months,
which threaten to get even worse. Delinquencies more than doubled over that time
and more than 155,000 lost their homes in bank repossessions during the first
three months of the year.
All that foreclosure activity added to the glut of homes on the market. The total inventory has risen to an average of 10 months worth of unsold homes. In addition, a record number - 2.9 million - of vacant homes are up for sale, according to the Census Bureau.
The big inventory has led to aggressive price slashing and increased incentives by
builders looking to sell homes. They’ve also cut way back on housing starts,
which are at a 17-year low.
With the latest readings on home prices from the National Association of Realtors showing the largest year-to-year drop since the group began reporting prices, it is becoming clearer that the housing market is under increasing pressures.
As the group maintains: all real estate is local; but unfortunately, more and more local markets are facing increased downward pressure on prices: according to the NAR, 77 metropolitan statistical areas showed price declines in the last quarter of 2007. In the first quarter of 2008, that number increased 10 an even 100.
In the south, the median existing single-family home price was $164,200 in the first quarter, down 7.5 percent from a year earlier.
Blamed by the NAR for the most-recent record low were, once again, rising foreclosures and decreased availability of mortgage loans. As the number of foreclosures are expected to increase, and banks continue to curtail lending, there is every indication that home prices will continue to slide.
For real estate investors (and their closing attorneys) looking for a bottom, this is yet another sign that the troubles in the housing market will continue for some time to come. With falling prices, though, come opportunities never seen by investors before: there are more potential deals out there than ever, banks are desperate to get rid of REO properties, and more and more short sales are being approved every day. Investors who understand the overall market forces at play and turn them to their advantage are the ones best poised to succeed.