Foreclosure filings, home prices drop

The number of people who received foreclosure notices in January fell 10 percent from December, but that’s still 18 percent higher than a year ago, a foreclosure listing service reported Thursday.

At the same time, the National Association of Realtors said an increase in the number of sales of foreclosed houses dragged down the median price of existing single-family homes by a record 12.4 percent to $180,100 in the final three months of last year. That is the lowest since the second quarter of 2003 when the price was $177,900.

The median is the price at which half sold for more, half for less.

The figures paint a picture of a painful correction of the housing market, a sector of the economy that has been at the forefront of the nation’s financial crisis.

As of Feb. 1, there were 770,754 foreclosed properties nationwide, said Daren Blomquist, the marketing and communications manager for RealtyTrac, the foreclosure listing service of Irvine, Calif.

“We’re going to continue to see prices drop,” Mr. Blomquist told The Washington Times. “Foreclosures are the properties that people are buying, and in some areas prices have dropped 40 percent to 50 percent. It’s a necessary part of the market correction, but it’s painful. The market has to pull back some in order to return to a normal, healthy housing market.”

RealtyTrac reported that 274,399 foreclosure filings occurred in January. There are about 128 million housing units throughout the country, Mr. Blomquist said. Nevada, California and Arizona topped the list of state foreclosure rates.

The sale of distressed homes accounted for 45 percent of sales in the fourth quarter, up from 38 percent in the three months from July through September, the National Association of Realtors said.

Lawrence Yun, the association’s chief economist, said in the same statement that housing provisions in the Obama administration’s economic stimulus package could encourage homebuyers and “we could see a quick lift in home sales for the critical spring home-buying season.

Rich Sharga, marketing vice president for RealtyTrac, said in a phone interview that a “reality check” of the median price drop cited by the association would be necessary because location is significant.

“If there are a number of homes that have been foreclosed in the same neighborhood, it will have an effect on the price,” he said. “Your home would be competing with the prices of foreclosed homes, and it would be hard to get full market value.”

Mr. Sharga predicted that housing prices will hit bottom “by the middle part of the year or the third quarter.”