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Big discounts boost home sales in West

September 25, 2008|Alex Veiga | The Associated Press

WASHINGTON — Sales of existing homes in the West climbed higher in August versus a year ago, bucking a national trend as buyers snatched up sharply discounted foreclosed properties in California, Arizona and Nevada, according to two reports Wednesday.

About 106,000 existing homes and condos were sold last month in the 13-state region. Without adjusting for seasonal factors, that number is up about 1% from the same month last year and flat versus July's figures, according to the National Assn. of Realtors.

The median price in the West slumped almost 24% from a year ago to $251,600, the association said.

Nationally, existing home sales declined 15% from August last year, on an unadjusted basis, and the median price tumbled 9.5% to $203,100.

In the Western region, states such as California and Arizona remain saddled with bank-owned homes, many of them bought during the housing boom with risky loans that have led to the current U.S. financial crisis.

But heavy discounting has been gradually luring buyers in recent months, and August continued that trend.

"People are taking advantage of those lower prices now," said Luke Tilley, a senior economist with Global Insight.

Four metropolitan areas -- Los Angeles, San Francisco, San Diego and Phoenix -- were among the top five markets with the steepest median home price declines in the nation last month, according to the Associated Press-Re/Max Monthly Housing Report, released Wednesday. The data includes all home sales recorded by all local agents, regardless of company affiliation.

But in terms of homes sold, Los Angeles, San Francisco, Las Vegas and Phoenix were the only major U.S. markets tracked in the AP-Re/Max Report to post a jump last month versus a year ago.

Seattle and Portland, Ore., meanwhile, were among the top 10 metropolitan areas in the nation with the most pronounced drop in home sales.

The Las Vegas metro area, which has had among the highest foreclosure rates in the nation for more than a year, had the biggest sales hike, according to the AP-Re/Max report.

Sales rose more than 83% from a year ago, though were essentially flat from July. The median price of a single-family home was $210,000, down 30% from a year ago.

"It's really been a resurgence of the first-time home buyer and investor that have come back into the market with the increase in foreclosure sales," said Jason Braford, ZipRealty Inc.'s district director in Las Vegas.

Unlike many investors who descended on Las Vegas to buy properties with an eye toward flipping them quickly, many investors now are looking to buy and hold properties longer, Braford said.

The surge in sales this year in Las Vegas has helped reduce the supply of unsold homes in the market more than 8% last month from a year ago.

"It's a good sign that the market is normalizing," Braford said.

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