Existing-home sales fall to 10-year low

Realtors report median price plunges 7.6% in 2d quarter as slump deepens

A third of all existing-home sales sales in the second quarter were foreclosures or ''short sales,'' in which lenders took a loss on the property, the National Association of Realstors said. (George Frey/Bloomberg News)

SAN FRANCISCO - Sales of existing homes fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent as the real estate recession deepened.

The median price tumbled to $206,500 from $223,500 a year earlier, the Chicago-based National Association of Realtors said yesterday. Sales of single-family houses and condominiums fell 16 percent to 4.913 million at an annualized pace.

Prices are declining with the United States on the brink of a recession, consumer prices rising and 30-year fixed mortgage rates at a six-year high last month. A third of all sales in the quarter were foreclosures or "short sales," in which lenders took a loss on a property, the Realtors said. Bank repossessions almost tripled in July from a year earlier, RealtyTrac Inc., a seller of foreclosure data, said in a separate report yesterday.

"It's getting worse," Rick Sharga, RealtyTrac's executive vice president for marketing, said. "The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."

US economic growth slowed to 1.8 percent in the second quarter as unemployment rose. Forecasters say home values will drop more. The S&P/Case Shiller home price index that tracks 20 cities may tumble as much as 12 percent this year, McLean, Va.-based Freddie Mac, the number two mortgage buyer, said Monday.

The biggest declines reported by NAR were in Sacramento, Calif., with a 36 percent drop, followed by the metropolitan area around Cape Coral and Fort Myers, Fla., down 33 percent.

Riverside and San Bernardino, Calif., tumbled 32.7 percent, and Los Angeles dropped 30 percent, according to the report. The metropolitan New York area, including parts of northern New Jersey and Long Island, fell 5.3 percent, and Boston dropped 11 percent.

Bank seizures of properties in default rose 184 percent to 77,295 in July, according to RealtyTrac. That was the steepest increase since the Irvine, Calif., company began reporting data in January 2005.

More than 272,000 properties, or one in 464 US households, got a default notice, were warned of a pending auction or were foreclosed on, RealtyTrac said. Nevada, California, and Florida had the highest rates, RealtyTrac said.

"In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values," Richard Gaylord, president of the Realtors' trade group, said in the report.

Price discounts are spurring buyers in some areas of the country, according to the Realtors report. One quarter of the states had price increases in the second quarter when compared with the prior three months.

There were 4.49 million US homes for sale at the end of June, the highest in a year, according the Realtors' association. At the current sales pace, that represented 11.1 months' worth, up from 10.8 months' worth at the end of May, the trade group said in July.

Foreclosures are depressing home prices, contributing to job losses, and weakening consumption as fewer people borrow against the value of their home, Lehman Brothers analysts said this month.