Accentuate the positive. Gild the lily.

Lots of cliches come to mind after reading the third quarter summary of existing home sales released on Monday by the National Association of Realtors. While the statistics showed that sales of previously owned homes and condos were down 12.7 percent from the third quarter of 2005 (which was, in fairness, the second highest level on record) and prices had actually dropped in 45 metropolitan areas (as opposed to the slowing appreciation that has been frequently predicted,) the NAR led the story by focusing on the improved outlook for buyers as prices "corrected" and declining sales activity "helped to build housing inventories."

Spin City!

Sorry, it is hard to ignore such a willing target. The report itself, however, is sobering. Homes in the third quarter sold at a seasonally adjusted annual rate of 6.27 million units, down 12.7 percent from the 7.18 million pace during the same period in 2005. The decline, however, was not universal; 10 states had increased sales compared to the June-September period last year.

Of the 148 metropolitan statistical areas examined in the NAR survey, 102 showed price increases, 21 in the double digit range. 45 areas experienced price declines. The median price of a single family house nationally was $224,900 which was slightly over one percent less than one year ago when it was $227,600.

On a regional basis the West took the biggest hit. The sales pace of 1.29 million units was 21.5 percent lower than the third quarter of 2005. The best performance in the region was in Montana where existing-home sales rose 6.4 percent from a year earlier.

In the Northeast 1.05 million units, annualized, were sold during the third quarter. This was a decline of 12.5 percent from one year ago and sales in the south were down 7.8 percent from one year ago although North Carolina showed a healthy growth with sales up 9.7 percent and Texas sales saw an 8.6 percent hike.

In the Midwest, total existing-home sales declined 11.8 percent to a 1.42 million-unit annual level compared with the third quarter of 2005. The best performer was South Dakota, where sales rose 3.1 percent from a year ago.

Nationally, the Salem, Oregon area recorded the greatest year-over-year price increase and it was substantial; the third quarter price of $228,000 was 24.7 percent higher than a year ago. Next was Elmira, N.Y., with a modest dollar increase of around $6,000 to $93,600 but this was still a bump of 21.4 percent from the third quarter of 2005. The Salt Lake City area, with a third quarter median price of $216,300, increased 19.2 percent in the last year.

The median price in the South dropped a tiny 0.1 percent to $187,300 and was down 2.6 percent in the Midwest to $170.500 and 0.9 percent in the West to $349,000. Median prices in the Northeast dropped 4.8 percent from one year ago to $276,000.

People on the coasts may find it hard to believe, but there are still places in this country where the median price of a home comes in under $90,000; several places in fact. Median prices in both Decatur, Illinois and the Youngstown-Warren-Boardman area of Ohio and Pennsylvania were $86,000 in the third-quarter. In the San Francisco-Oakland-Fremont metro area, however, the median price was $749,400.

What is that expression? Oh, yeah, location, location, location.