KANSAS CITY — Existing home sales in the Midwest dipped almost 5 percent in December compared with a year ago while the median sale price fell to $140,800, the National Association of Realtors said Monday.
Midwest sales were softer than the national numbers, but the 11.4 percent median price decline was better. Nationwide sales, unadjusted for seasonal factors, increased about 1 percent compared with December 2007, while the median sale price fell 15.3 percent to $175,400.
Home sales in the Midwest fell in seven of the 10 major metro areas tracked in The Associated Press-Re/Max Monthly Housing Report, also released Monday. The report analyzed home sales recorded by all real estate agents, regardless of company affiliation, in the metropolitan statistical areas.
Meanwhile, the median home price declined in all but one of the metro areas covered by the AP-Re/Max report.
The December report didn't include sales figures for St. Louis and Fargo, S.D., because final numbers for those metropolitan areas were not available.
The only locations reporting increased home sales — Detroit, Minneapolis and Cleveland — also saw huge drops in median home sale prices, showing that buyers were grabbing bargains in those cities.
Detroit, which has suffered the layoffs and other economic problems surrounding the troubled auto industry, recorded the biggest drop in median home prices in the nation in December and its biggest increase in sales in the Midwest. Sales were up 22.4 percent while median home sale price was down 44.4 percent to $52,000, the AP-Re/Max report showed.
In Minneapolis, home sales increased 19.2 percent while the median home sale price fell almost 22 percent to $163,900, the AP-Re/Max report showed.
Joyce Peterson, a real estate agent with Coldwell Banker in suburban Woodbury, Minn., said foreclosures and bank sales have hurt prices, but she said homeowners are becoming more competitive and lowering prices themselves.
"The list prices reflect the market more, so most sellers are being realistic of what's going on in the market right now," she said.
She added that the tighter economy has condominium owners willing to pour more money into updating the look of their units to ensure they sell.
"Most people don't want to move in and have to renovate it," she said. "We've seen some condos sit on the market where the sellers won't do anything. Even if it's priced right, (buyers) still don't want that unit."
Scott Parkin, owner of Minneapolis-based Hoffman Parkin Urban Realty, added that lending problems have slowed down some parts of the market more than others.
"They used to say wealthy individuals weren't affected by downturns like this, but we've seen a downturn in high-priced luxury sales, those over $1 million," Parkin said.
The two slowest Midwest markets for home sales tracked in the AP-Re/Max report were Milwaukee and Des Moines, Iowa.
Des Moines saw median home sale prices actually increase 0.7 percent, compared with December 2007, but existing home sales fell 19.5 percent, the AP-Re/Max report showed.
In Milwaukee, another industrial town dealing with the economic slowdown, home sales dropped 21.5 percent in December while the median home sales price declined 10.3 percent to $175,000.
David Price, an agent with Milwaukee Realty, said he viewed the local market as "resilient" and when quality homes come on the market there is no shortage of buyers.
"I don't know if it hasn't hit Milwaukee yet or we're at the end of the trend," Price said. "The numbers are bad, but you see condos selling for $300,000, multiple condos selling at the same time."
He said many buyers are waiting longer to buy, worried that they're overpaying.
"They don't want to catch these assets as they're falling further," he said. "And financing is tricky. It's a lot trickier to get than eight to 10 months ago."
In Chicago, the highest-priced Midwest metro area tracked in the report, the median home sales price skidded 18.7 percent to $195,000, according to the AP-Re/Max report, while total home sales were down 15.4 percent, compared with the same month a year ago.
Jeff Payne, an agent with Best Chicago Properties, said the suburban market is tough and some urban neighborhoods have been "devastated" by rounds of foreclosures and bank sales, but other inner-city neighborhoods, like Lakeview and the West Loop, continue to be strong.
"I'm selling my listings within 30to 60 days, which is very good. But I'm pricing things appropriately," Payne said, adding that wider improvement in the market won't be possible until the inventory of existing and new homes for sale declines.