Home Run

First quarter 2009 home prices showed a record year-over-year drop.

The steep slide in home price accelerated at a record pace during the first three months of 2009, according to an industry report issued Tuesday.

The national median home price of single family homes sold during the first quarter fell 13.8% to $169,000 year over year, and 6.2% compared with the last quarter 2008, according to the National Association of Realtors (NAR). That was the largest year-over-year decline in the 30-year history of the report.

NAR attributed much of the loss to two factors: First-time homebuyers, who are often entry-level buyers, accounted for about half of all purchases during the quarter. And many buyers took advantage of the deeply discounted prices of foreclosed properties and short sales. These "distressed properties" typically sell for 20% less than traditional homes, according to NAR. These homes also accounted for about half of all transactions.

Despite all the calls for a housing market bottom this summer, it's just not going to happen. Prices will continue to fall nationally as unemployment rises and option mortgages reset to higher rates, and both of those of course will only serve to lower home prices even more as more foreclosures flood the market.