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Us House Price Declines Accelerate In 2nd Quarter

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Aug. 12 (Bloomberg) -- Home price declines in the U.S. accelerated in the second quarter, dropping by a record 15.6 percent from a year earlier, as foreclosures weighed on values.

The median price of an existing single-family home dropped to $174,100, the most in records dating to 1979, the National Association of Realtors said today. Total sales rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million from the first quarter and fell 2.9 percent from 2008’s second quarter.

Prices fell in 129 out of 155 metropolitan areas from a year ago and 39 states experienced sales increases from the first quarter, the Chicago-based realtors group said. Sales in U.S. housing market at the heart of the global recession are beginning to stabilize, said Patrick Newport, an economist for Lexington, Massachusetts-based IHS Global Insight.

“I don’t think we’re at a bottom yet in home prices,†said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis. “There’s also a pretty big shadow supply of houses. People are kind of waiting for the bottom but there’s a pent-up supply out there.â€

Home prices are falling even as a survey of economists indicates that the U.S. economy is recovering from the worst recession since the 1930s. The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey.

Regional Price Declines

The median existing home price fell 9.7 percent in the Northeast from the same period a year earlier to $246,000, the group said. Sales jumped 15 percent from the first quarter and are down 8.4 percent from a year ago.

In the Midwest, prices fell 8.6 percent to a median of $146,800 from a year earlier. In the South, prices slid 10.3 percent to $158,600. In the West, they declined 26.6 percent to $212,600.

The largest decline was in the Cape Coral-Fort Myers metropolitan region, where the median price fell 53 percent to $84,000 from a year earlier. The second-largest decline was in the Las Vegas, Nevada, region, where prices fell 39.7 percent, followed by the Riverside-San Bernardino-Ontario metro area in California, where prices fell 39.1 percent.

The biggest increase in prices was in the Davenport-Moline- Rock Island area of Illinois and Iowa, where prices surged 30.6 percent to $113,200 from a year earlier. The second biggest jump was in the Cumberland metro area of Maryland and West Virginia, where prices rose 21.7 percent. The Elmira, New York, area had the third-biggest increase, where prices rose 11.3 percent.

Lower Rates

Home prices are tumbling even as mortgage rates remain near all-time lows. The average U.S. rate for a 30-year fixed home loan was to 5.22 percent last week, down from 5.25 percent the prior week, according to mortgage buyer Freddie Mac of McLean, Virginia. The rate dipped to 4.78 percent in April, the lowest ever recorded.

U.S. foreclosure filings -- notices of default, auction or bank seizure -- rose to a record in 2009’s first half, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. More than 1.5 million properties, one in every 84 U.S. households, received a foreclosure filing, RealtyTrac said in a July 16 report.

Default Discounts

Homes in or near default typically sell for about 20 percent less than non-distressed property, according to the Realtors group. Those sales reduce the value of each surrounding home by an average $8,667 because the lower price is used by appraisers to set values for other properties in the area, according to the Center for Responsible Lending in Durham, North Carolina.

The world’s largest economy will contract 1.3 percent this year, according to a July 10 forecast by Fannie Mae. The U.S. unemployment rate may climb to 9.9 percent in 2010, from 9.3 percent this year, according to the mortgage buyer controlled by the U.S. government.

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im in las vegas next weekend. must check out a foreclosure or 2. down 40% in a year and no signs of bottoming. ouch. US property will look so bloody cheap compared to here when they bottom out

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Good old yanks. If Carlsberg did a house price crash, it'd look like America!

If Carlsberg did a house price crash, it'd look like Northern Ireland!

It's down around the same amount as the US in about half the time! :lol:

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