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Median home prices fall in 88% of cities

May 13, 2009

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Home prices fell in nearly nine out of every 10 U.S. cities in the first quarter of this year as first-time buyers looking for bargains dominated the market.

While sales rose in six states among the hardest hit by the housing slump, analysts said the nascent signs of recovery in the market could be short-lived if employers continue to lay off workers in bulk.

The National Association of Realtors said Tuesday that median sales prices of existing homes declined in 134 out of 152 metropolitan areas compared with the same period a year ago. Prices rose in the other 18 cities.

Nationwide, sales of foreclosures and other distressed properties made up about half of the market. Overall, sales dipped 6.8 percent from the year-ago period.

“I think we’re near a bottom, but we’re not there yet,” said David Resler, chief economist at Nomura Securities. While prices could hit bottom as soon as this summer, he said, they are likely to remain stable and start edging higher slowly.

“We are finally beginning to see the seeds of a bottoming” in housing, former Federal Reserve Chairman Alan Greenspan said at the Realtors’ midyear conference in Washington, though he cited the massive inventory of unsold properties as a big concern.

At the conference, discussion focused on how to turn around the beleaguered market. Real estate agents hope the $8,000 tax credit for first-time buyers will boost sales.

But in high-priced areas such as New York City, it doesn’t make much of a difference for buyers. “It’s not really a major motivator for people,” said Robert Oppenheimer, a Re/Max broker in nearby Englewood Cliffs, N.J. “It’s almost an afterthought.”

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