In nine out of every 10 U.S. cities home prices fell in the first quarter of 2009 even as first-time buyers took advantage of bargains that have filled the market.
As home sales rose in six states who are among the hardest hit by the housing market crisis there are signs of recovery, provided that employers don't continue to lay off workers.
It was reported Tuesday by The National Association of Realtors that the median sales prices of existing homes dropped in 134 out of 152 metropolitan areas compared to this same time last year. However, prices did rise in 18 other cities.
Amazingly, half of the nationwide home sales consisted of foreclosures and other distressed properties.
Chief economist of Nomura Securities, David Resler, said, "I think we're near a bottom, but we're not there yet. While prices could hit bottom as soon as this summer, they are likely to remain stable and start edging higher slowly."
Former Federal Reserve Chairman Alan Greenspan recently said at the National Association of Realtors' midyear conference in Washington D.C., "We are finally beginning to see the seeds of a bottoming" in the housing market.
Shaun Donovan, the Housing and Urban Development Secretary, said the Federal Housing Administration may soon allow their borrowers to turn the $8,000 tax credit into a down payment through short-term loans.
He further said that the tax credit, "is not only a tremendous opportunity for first-time home buyers, but also an enormous benefit for communities struggling to deal with an oversupply of housing."
In the National Association of Realtors' first-quarter report, except for Nevada, California, Arizona, Florida, Virginia and Minnesota, where sales have gone up due in large part by buyers grabbing foreclosures at deeply discounted prices, home sales fell in all the other states. Sales rose by 81 percent in California and grew 50 percent in Arizona and more than doubled in Nevada, which may mean that the worst may be over for those three states.