The National Association of Realtors on Thursday released a report on second-quarter existing home sales that put nationwide sales of single-family houses and condos at a seasonally adjusted annual rate of 4.91 million units, down 0.8% from 4.95 million units in the first quarter and 16.3% below a 5.87 million-unit pace in the second quarter of 2007.

The Realtors said the median price for an existing single-family was down 7.6% from the same period last year, to $206,500, owing to the drag foreclosures and short sales are putting on overall home prices. The NAR estimated that an astounding one-third of all transactions during the quarter involved foreclosures or short sales.

Said Lawrence Yun, NAR chief economist, "The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops. Buyers in these areas are responding to deeply discounted home prices."

To back up that assertion, the NAR said existing-home sales during the quarter increased 25.8% in California, 25.0% in Nevada, 20.5% in Arizona and 10.1% in Florida. The largest sales gain during the second quarter was in Idaho, up 51.7%. Virginia was another gainer, with sales up 10.5%.

At the same time, the steepest declines in single-family home prices in the second quarter were in markets within the regions with the highest sales gains. The median price in the Sacramento-Arden-Arcade-Roseville area of California fell 35.6% from a year ago to $229,500. Similarly, Cape Coral-Fort Myers, Fla. dropped 33.1% to $178,100; and Riverside-San Bernardino-Ontario, Calif. saw median prices drop 32.7% to $265,200.

Price declines exceeding in 20% were reported in the Los Angeles-Long Beach-Santa Ana area; the Anaheim-Santa Ana-Irvine, Calif., area; Las Vegas-Paradise; and Phoenix-Mesa-Scottsdale.

"Prices have fallen sharply and quickly in very distressed markets, but most or all of the price declines may have already occurred in these areas since buyers have now returned to those markets," said Yun.

Regionally, the median existing single-family home price in the Northeast fell 9.6% to $269,000 in the second quarter from the same period in 2007; the Midwest was down 0.9% to $161,500; the South was down 4.1% to $177,000 and the West declined 17.4% to $290.600.

Learn more about markets featured in this article: Los Angeles, CA, Phoenix, AZ.