Median Price of Homes: Record 12.4% Drop in 2008 to $180,100

In 134 out of 153 metropolitan areas across the nation, home prices dropped in ‘08, and 19 markets reported a price increase or no decline. A rise in foreclosures and short sales drove the ’08 fourth quarter median price of homes down to $180,100, which represents a 12.4% decrease from fourth quarter ’07 prices. This decline signifies the largest year-over-year (YOY) decline of home prices since the National Association of Realtors began keeping records in 1979. The median price of condominiums during the same period dropped 15.8% to $186,000.

Distressed properties (foreclosures and short sales) accounted for an alarming 45% of all home sales in 2008 and helped illustrate this era cursed by terrible lending practices, no regulation and unhealthy consumer debt. In some markets, where foreclosures are higher than national averages, the median price of homes dropped by as much as 50.8%; the largest increase in median home prices was in Beaumont-Port Arthur, TX, with an increase of 16.7%.

The Obama administration is working on two new plans to help curb the national decline in home prices, stimulate home sales and revive the economy.

• The Economic Stimulus Plan will likely become law in the next few days; it looks like the final plan will include an $8,000 tax credit for first-time homebuyers. The $8,000 tax credit is not a loan, unlike the previous $7,500 tax credit announced in 2008, and does not have to be repaid by the homebuyer. In its entirety, the Economic Stimulus Plan had a price tag of $789 billion as of 2/12/09 (AM).

• TARP II is the ‘09 Financial Stability Plan announced on Feb. 10, 2009 by Treasury Secretary Tim Geithner. Although only a few broad details were released, the plan promises three steps that will help stabilize financial institutions, reduce the amount of bad assets on bank balance sheets and extend relieve to consumers and businesses struggling to meet financial commitments. The current price tag for TARP II is as much as $2 trillion, yes, quadrillion is next.

Looking at some of the Median Home Prices Changes Throughout the Nation

Metropolitan Area Declines:

1. Cape-Coral-Ft. Myers, FL – (50.8%)
2. Saginaw, MI – (41.4%)
3. Riverside-San Bernardino, CA – (40.8%)
4. San Jose, CA – (37.7%)
5. Phoenix-Mesa-Scottsdale, AZ – (35.5%)
6. Las Vegas-Paradise, NV – (33.6%)
7. Miami-Fort Lauderdale-Miami Beach, FL – (32.3%)
8. Atlanta-Sandy Springs-Marietta, GA (21.4%)
9. Dayton, OH – (17.6%)
10. Denver-Aurora, CO – (12.7%)
11. Oklahoma City, OK – (7.9%)
12. Albuquerque, NM – (6.2%)
13. Dallas-Fort Worth-Arlington, TX – (4.8%)
14. Charleston-North Charleston, SC – (5.2%)
15. Salt Lake City, UT – (1.6%)

Metropolitan Area Increases:

1. Beaumont-Port Arthur, TX – 16.7%
2. El Paso, TX – 5.3%
3. Jackson, MS – 4.7%
4. Wichita, KS – 3.9%
5. Shreveport-Bossier City, LA – 2.8%
6. Florence, SC – 1.9%
7. Pittsfield, MA – 1.7%
8. Charleston, WV – 1.5%
9. Reading, PA – 1.0%

(source: Realtor.org)

Related Posts

• February 17, 2009 -- $8,000 Tax Credit for Home Buyers | Economic Stimulus Plan Is Law
• February 13, 2009 -- Rescue Plan for Housing – Subsidized Lower Monthly Payments
• February 10, 2009 -- Senate Passes Economic Stimulus Plan – $15,000 tax Credit for Homebuyers Still In
• March 31, 2009 -- U.S. Commerce Department Reports New Home Sales Up