National home cost continue to fall under the pressure of the economy. There has been a decrease in the home values of approximately 80% of Metropolitan communities across America. The new current national median home cost is $177,900 which is 11% below the national median price during the third quarter of last year. According to the National Association of Realtors, one-third of current home sales are for distressed properties, many of which have gone through foreclosure or are short sales.
The NAR blames the decrease in the national median home prices on the increase in the amount of distressed properties, which are being sold up to 80% under their value. The most severe home value decreases have occurred in the metropolitan areas of Florida and Nevada, which are both states that are popular with tourism. The Cape Coral/Fort Meyers area of Florida and the Las Vegas area of Nevada have seen home values decease 40% and 34.5% respectively. While percentages are important to some, hard numbers are important to others. In 2006 the median home price in the Cape Coral/Fort Myers area was $268,200, the current median home price is $98,000. The Las Vegas area has also seen a drastic decline in home prices with the current median home price being $138,500, down from $317,400 in 2006. Currently, Orlando, Fl also sits in the storm of declining home prices. Orlando has seen a 26% decrease in home prices, along with many other national tourist attraction cities. These cities usually have higher home sales due the sale of vacation properties and second homes.
Home sales have however rose 11.4% across the nation in the third quarter which accounts for 5.3 million housing units. Lawrence Yun, the chief economist for the NAR, attributes the increase in home sales to the very attractive federal tax credit. The extension of the tax credit along with other changes that benefit previous home owners and home owners in higher income brackets, may have also contributed to the increase in home sales. Yun also believe that the tax credit will continue to offset the rapid amount of forecloses on the market but enticing buyers.