Home prices dropped again last month in the Pikes Peak region — bad news for sellers, but good news for buyers as local real estate experts point to some positives in a soft market.

The median price for homes that sold in the Pikes Peak region in February fell to $197,500, down 8.1 percent from the same month last year, according to a report Thursday by the Pikes Peak Association of Realtors.

It’s the largest year-over-year percentage decline for any month since the association started compiling median prices in 1994, and the seventh consecutive month local prices have dropped. The median is the midpoint; in February, half of the homes that sold went for less than $197,500, while the other half went for more.

Economists and real estate experts have cited an ample supply of homes and an influx of foreclosures coming back on the market as some of the reasons prices have fallen.

Sellers who have been in their houses for several years and have built up equity, or value, typically are making money on their sales now, although maybe not as much because of the market downturn, real estate experts have said.

Sellers who have lived in their houses for two or three years, however, likely won’t make much in today’s market, although appreciation rates vary from neighborhood to neighborhood.

But lower prices mean that a seller of, say, a $250,000 house can more easily move up to something pricier, said Jay Gupta, managing broker of Gloriod & Associates in Colorado Springs and 2008 chairman of the association’s board.

Because interest rates remain relatively low, and with shrinking prices, some buyers can afford more house for their money, Gupta said. Thirty-year, fixed-rate mortgages averaged 6.03 percent nationally this week, down from 6.24 percent last week, mortgage giant Freddie Mac reported Thursday.

But selling a house is tougher these days. February sales totaled 556, down 16.9 percent from the same month last year, according to the association. Year to date, sales have totaled 1,091, a nearly 19 percent decline from a year ago.

Price decreases in Colorado Springs aren’t as bad as some cities in the southwest and on the East Coast, which have seen prices tumble after years of doubledigit increases.

“What happens in Vegas is not happening here,” said Gary Eisenbraun, head of Academy Appraisal & Real Estate and vice president of the Realtor Service Corp., the association’s research arm. Las Vegas prices fell nearly 13 percent at the end of 2007, according to the National Association of Realtors.

Houses for sale on the local association’s multiple listing service totaled 5,571 in February, a 7.1 percent increase from the same time last year.

The supply has changed little over the past few months, and it has leveled off from a high of more than 7,000 last summer, Gupta said.

“That is a very encouraging sign,” he said.

The association’s figures on prices, sales and supply reflect homes whose sales are handled by real estate agents, which represent a majority of transactions. Most of the sales take place in El Paso and Teller counties.

Inventory must drop and sales increase before prices will rise, said Sam Cameron of commercial brokerage Cameron Butcher Co., echoing comments from a top National Association of Realtors economist. Cameron will become the local Realtors Association chairman next year.

“We’ve got to see jobs created,” Cameron said. “I’m in the commercial sector. Some of the leads (of prospective employers) that the (Colorado Springs) Economic Development Corp. is running through right now would be substantial.”

Not only do new jobs add potential home buyers, but they have a ripple effect and boost consumer confidence among existing residents, Gupta said.

CONTACT THE WRITER: 636-0228 or rich.laden@gazette.com

NATIONALLY

Home foreclosures soared to an all-time high in the final three months of 2007, the Mortgage Bankers Association said Thursday. The proportion of all mortgages that slipped into foreclosure from October through December was 0.83 percent. The previous record high, 0.78 percent, came in the July-through-September period.

Meanwhile, more homeowners fell behind on their monthly payments, the association reported. The delinquency rate — when payments are at least 30 days past due — for all mortgages climbed to 5.82 percent, the highest since 1985.

- The National Association of Realtors said its seasonally adjusted index of pending sales for existing homes in January held at 85.9, the same reading as December and just short of a revised record low of 85.8 in August. An index reading of 100 is equal to the average level of sales activity in 2001, when the index started.

THE ASSOCIATED PRESS