Associated Press – Median home prices rises, as sales pick up

Aug. 12, 2009 11:58 AM
Associated Press

WASHINGTON – A real estate group says home sales and prices posted gains in the second quarter, another sign that the ailing housing market is finally coming to life.

The National Association of Realtors says the median sale price in the quarter was $174,100, up 4% from the first quarter, but still almost 16% below a year ago.

Prices were down from a year ago in 129 of 155 metropolitan areas the group tracks. Thirty-nine states experienced sales increases from the first quarter and nine states were higher than a year ago.

Sales rose to a seasonally adjusted annual rate of 4.76 million, from 4.58 million in the first quarter, but were still about 3% below a year ago.

According to Lawrence Yun, NAR chief economist, the areas with the largest price declines were those with the most foreclosures. The biggest drop, nearly 53%, was in Fort Myers, Fla. Prices also fell 35% or more in Phoenix, Riverside, Calif. and Las Vegas. The biggest price gain, nearly 31%, was in Davenport, Iowa, followed by Cumberland, Md., at nearly 22%.

Yun said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said.

Yun said on average each home sale pumps an additional $63,000 into the economy because it generates demand for related goods and services.