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Originally published Friday, November 30, 2007 at 12:00 AM

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U.S. home prices drop for quarter; not so here

U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released...

The Associated Press

WASHINGTON — U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing-market slump.

But Washington cities continued to defy that trend.

U.S. home prices dipped 0.4 percent nationwide in the July-September period, compared with the previous quarter, the Office of Federal Housing Enterprise Oversight (OFHEO) said.

But prices in the Seattle-Bellevue-Everett region rose 1.24 percent, OFHEO found.

Yakima's prices climbed 2.53 percent in the quarter, Spokane's, 1.74 percent and Wenatchee's, 0.7 percent.

Compared with the third quarter of 2006, U.S home prices posted an increase of 1.8 percent, but it was the smallest year-over-year increase since 1995, according to the agency, which oversees the big mortgage-finance companies Fannie Mae and Freddie Mac.

"While select markets still maintain robust rates of appreciation, our newest data show price weakening in a very significant portion of the country," agency director James B. Lockhart said in a statement. Prices declined in more than 20 states, he said.

Also on Thursday, the Commerce Department said the U.S. median sales price of a new home fell 13 percent in October, compared with a year ago, to $217,800. It was the biggest annual drop since September 1970 in the median price, the point at which half of homes sell for more and half for less.

A mortgage research firm, meanwhile, said U.S. foreclosure filings nearly doubled in October from the same month last year. Foreclosure filings numbered 224,451 in October, RealtyTrac said Thursday.

OFHEO data show many of the cities and states experiencing the sharpest price declines in the quarter were areas that had posted the sharpest increases a couple of years ago during the housing boom.

One-year price declines were steepest in California (down 3.6 percent), Massachusetts (2.3 percent), Michigan (3.7 percent), Nevada (2.4 percent) and Rhode Island (2.2 percent).

"Rising inventories of for-sale properties are clearly having a material impact on home prices," said Patrick Lawler, the agency's chief economist.

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Washington state, however bucked that trend, with 6.98 percent price growth year over year. That was the fifth-highest in the nation behind leader Utah at 12.89 percent.

Other measurements of home prices have been falling for some time while OFHEO's index, until now, had continued to rise. Economists point to differences in how home prices are calculated.

The widely tracked Standard & Poor's/Case-Shiller nationwide housing index, which fell 4.5 percent in the third quarter from last year, focuses on 20 major metropolitan areas and includes expensive properties as well as cheaper ones. The government index, while more national in scope, excludes higher-priced homes and ones financed by riskier mortgages.

A separate report Wednesday from the National Association of Realtors said the median price of a home sold in October declined to $207,800, a drop of 5.1 percent from a year ago, the biggest year-over-year price decline on record.

But many economists consider the OFHEO and Case-Shiller indexes to be better measurements than the Realtors' report because both indexes examine price changes for the same properties over time instead of calculating a median price.

The OFHEO index is based on home loans of $417,000 or less bought or backed by federally sponsored mortgage companies Fannie Mae and Freddie Mac. That excludes some riskier loan types.

Seattle Times business reporter Elizabeth Rhodes contributed to this report.

Copyright © 2007 The Seattle Times Company

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