Prices of single-family homes fell nationwide in the second quarter, but at a slower rate than in the previous three-month period, an economic-analysis...

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Prices of single-family homes fell nationwide in the second quarter, but at a slower rate than in the previous three-month period, an economic-analysis company said Thursday.

Seattle’s median price gently bucked that trend, rising to $394,900 in the second quarter, up from $392,700 the quarter before, according to the House Prices in America study by Global Insight.

However, those prices are still below a year ago, when Seattle’s median was $403,800 — or 30.4 percent overpriced, by Global Insight’s calculations. Last quarter, homes were 18.9 percent overpriced, the company said.

Nationally, six housing markets were overpriced by 35 percent or more, down from 51 markets in 2005. This “extreme overvaluation” is limited to Washington state, Oregon, Hawaii and Utah, the study said.

In this state, Wenatchee is said to be overvalued 35.1 percent, as did Longview, at 37 percent. Bellingham wasn’t far behind at 32.2 percent.

The median price of a U.S. home slipped at an annual rate of 5.3 percent in the second quarter, compared with a 6.6 percent decline in the first quarter of this year, Global Insight said.

The most severe declines were in California, Florida and Michigan, representing 43 of the 50 worst-performing metropolitan areas. Other cities in the bottom 50 include Las Vegas, Phoenix and Washington, D.C.

Weak demand, rising foreclosures and fewer sales of high-priced homes have hurt prices in the sagging housing market. But the slowdown in price declines and the amount of extremely overvalued markets are signs that the housing “bubble” has burst, the company said.

Still, real-estate markets are not ready to recover, and there remains a glut of unsold homes on the market — a situation made worse by foreclosures, the company said.

The study examines 330 real-estate markets and bases its regional valuations on factors such as current and historic home prices, interest rates, household incomes and population density.

“Although the markets that were extremely overvalued two years ago are seeing expected price declines, other areas are seeing price declines due to weak economic conditions,” said Jeannine Cataldi, senior economist and manager of Global Insight’s Regional Real Estate Service. “The market has a lot of inventory to work through before prices will change course.”

Washington prices generally fall
Single-family home prices in many Washington cities are falling, but housing is still overpriced, according to Global Insight, an economic analysis firm.
First quarter 2008 Second quarter 2008
Median price Over valuation Median price Over valuation
Bellingham $300,000 33.8% $300,000 32.2%
Bremerton $286,100 16.9% $287,700 14.8%
Longview $208,900 39.1% $207,800 37.0%
Mount Vernon $290,200 30.6% $285,800 26.9%
Olympia $258,200 22.6% $257,500 21.1%
Seattle $392,700 20.2% $394,900 18.9%
Tacoma $278,500 23.4% $278,100 21.6%
Wenatchee $255,900 35.0% $259,100 35.1%
Yakima $155,000 15.1% $159,200 17.9%
Source: Global Insight