NAR: Q4 prices fall in a record number of metropolitan areas
* Prices fell in 77 (51.3%) of the 150 metropolitan areas that the NAR tracked. That was the most since the group began collecting this information in 1979. It's also up from 36% in Q3 and 34% in Q2.
* The decline for single-family homes across the U.S. came to 5.8% year-over-year. Prices fell the most in the West (-8.7%) and the least in the Midwest (-3.2%).
* Which markets fared the worst? Lansing-E.Lansing, MI saw prices fall 18.8%; Sacramento-Arden-Arcade-Roseville, CA witnessed an 18.5% decline; Riverside-San Bernardino-Ontario, CA was off 16.8%; Jackson, MS was down 16.8%; Decatur, IL was down 15.9%; and Los Angeles-Long Beach-Santa Ana, CA experienced a 13.1% drop. Other markets in Florida and the Midwest were also weak.
* The best performing metros were Cumberland, MD/WV at +19%, Yakima, WA at +18%, Binghamton, NY at +14.8%, Kennewick-Richland-Pasco, WA at +14%, and Bismarck, ND at +13.5%.
The spreading credit crunch and the winding down of the housing and mortgage boom continue to drive house prices lower in a wider range of U.S. markets. The speculative buyers that fueled large price gains in places like California and Florida are now trying to sell, or being foreclosed on. Meanwhile, economic weakness and job losses in certain areas of the U.S. are hurting values there.
The Federal Reserve is trying to blunt the impact of the bust by cutting interest rates. We have also seen other forms of aid targeted at borrowers who face ARM rate resets and borrowers who need "jumbo" home loans. But for-sale inventory levels remain high. Lending standards are still being tightened. And home prices are still -- even now -- out of line with underlying incomes in many markets. As a result, prices will likely slump further in 2008.