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U.S. home prices decline 12%

February 13, 2009|Bloomberg News

Home prices nationally dropped 12% in the fourth quarter, the most on record, amid foreclosures and a recession that pushed buyers out of the market.

The median price of a U.S. home declined to $180,100 from $205,700 in the same period a year earlier, the National Assn. of Realtors said Thursday. Prices declined in almost 9 of every 10 cities.

The worst U.S. housing slump since the Depression is deepening as foreclosures drain value from neighboring homes and the economic recession worsens. Sales of properties with mortgages in default accounted for 45% of all transactions, the Chicago-based national association said.

"The housing sector was already weak, and now we are seeing deeper employment reductions," said Brian Bethune, chief financial economist at IHS Global Insight in Lexington, Mass. "Every round of job cuts means fewer people who can get a mortgage and buy a house."

Prices slumped in 134 U.S. metropolitan areas, rose in 18 and were unchanged in one. It was the biggest proportion of declines in data dating to 1979.

The steepest price decline was in Florida's Fort Myers metropolitan area, down 51%, according to the Realtors' report. Saginaw, Mich., was second, with a 41% drop. The next five biggest decreases were all in California: Riverside, 41%; San Jose, 38%; San Francisco and Sacramento, 37%; and San Diego, 36%.

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