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Distressed Sales Drive Down Home Prices

Distressed sales, including short sales and foreclosures, accounted for nearly half of all transactions during the first quarter of 2009 and weighed down home prices in many markets, according to the NAR’s quarterly survey.

Out of 152 metro areas surveyed, 134 reported lower home prices in the first quarter while 18 had price increases. First-time buyers accounted for nearly half of all home purchases in the quarter.

The national median existing single-family home price was $169,000, 13.8 percent below the first quarter of 2008. Total sales were at a seasonally adjusted annual rate of 4.59 million units, down 3.2 percent from 4.74 million units reported in the fourth quarter and 6.8 percent below the 4.93 million units a year ago.

In the Northeast, existing-home sales fell 10.3 percent during the quarter and are 20.1 percent below a year ago. Sales slipped 2.2 percent in the Midwest and are 13.1 percent below a year ago. In the South, they declined 2.5 percent and are 12.7 percent lower than last year. In the West, existing-home sales slipped 0.9 percent but are 24.3 percent higher than a year ago.

Sales increased in 17 states during the quarter from the previous quarter, and six posted higher sales rates than a year ago. The largest sales gain from a year ago occurred in Nevada, where sales rose 116.8 percent, followed by California (80.6 percent), Arizona (50.2 percent) and Florida (25.0 percent). Minnesota and Virginia also had double-digit sales increases.

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