Home prices fell in more than three-fourths of U.S. cities in the first quarter as foreclosures that sell at cut-rate prices devalued real estate.
The median price of a single-family home dropped in 118 metropolitan areas out of 153 cities measured, the National Association of Realtors said in a report today. The biggest decline was in Biloxi, Mississippi, followed by Akron, Ohio.
Real estate values are slumping as mounting foreclosures undermine prices. The share of homes sold in March that were distressed properties, meaning foreclosures or short sales, rose to 40 percent from 39 percent in February, the Realtors group said last month. There were 2.2 million homes in foreclosure in March, up 1.4 percent from a month earlier, according to Lender Processing Services Inc. in Jacksonville, Florida.
“There are a lot of foreclosures being dumped on the market at fire-sale prices, and there are a lot of foreclosures still in the pipeline,” said Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts. “The banks don’t want to hold homes on their books, so they will sell for whatever they can get.”
In Biloxi, the median price of a home sold fell 23 percent in the first quarter from a year earlier. Prices dropped 21 percent in Akron and Salem, Oregon. Those cities were followed by Dayton, Ohio, where the median price decreased 20 percent.
Cities With Gains
The best-performing cities were Charlotte, North Carolina, with a 12 percent advance; followed by Buffalo, New York, and Burlington, Vermont, with increases of 11 percent.
The median price of a single-family home in the New York metropolitan area fell 1.2 percent in the first quarter. The Edison, New Jersey, region had a 6.9 percent decrease.
Prices in the Boston metropolitan area rose 0.1 percent, the Chicago-based Realtors association said.
In a separate report today, the Realtors said U.S. existing-home sales fell 0.8 percent in the first quarter from a year earlier to an annual pace of 5.14 million. The biggest decline was in Tennessee, where transactions decreased about 15 percent. The largest advance was in South Dakota, with an 86 percent gain.