May 13--Home prices dropped 12.8 percent in the New York metropolitan area -- which includes North Jersey -- in the first quarter of 2009 from the same period a year ago, the National Association of Realtors said Tuesday.

The median price of an existing single-family home in the area that includes Bergen, Passaic and Hudson counties fell to $429,900, down from $492,800 a year earlier, the NAR said.

The volume of home sales in New Jersey plummeted 18.7 percent from the first quarter of 2008. Sales of single-family homes, condos and coops were running at a seasonally adjusted annual rate of 93,400 in the first quarter of 2009 -- about half the 180,000-plus annual sales during the housing boom in 2004 and 2005.

Nationally, home prices declined 13.8 percent, to a median of $169,000. That's almost 24 percent below the median price at the national market's peak in 2006. In the New York metro area, prices are down around 20 percent after peaking in 2007 at a median of around $540,000.

About half of all sales nationwide were distressed sales, such as foreclosures and short sales, where the lender accepts less than is owed on the mortgage. In several of the most troubled markets in the nation, including California, Florida, Arizona and Nevada, property values have fallen so low that bargain-hunters are flooding back in, pushing up the number of sales.

But in this area and much of the rest of the nation, potential buyers are apparently holding back because they are worried about their job security at a time when unemployment is above 8 percent.

"It's a big issue," said Cathy Denis, broker of Century 21 Mainstream in New Milford. "Even if they have a job now, who knows what will happen?"

In addition, it's tougher to find mortgages now than during the housing boom because lenders have tightened their standards.

And many potential buyers believe that if they wait, prices may fall further. That view is supported by some real estate experts, including Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide. He predicts that prices will drop a total of about 9 percent during 2009. Denis said she thinks prices may dip another 5 percent this year.

Denis said that many buyers seem ambivalent -- nervous about making the commitment, but drawn to home purchases because of lower prices, mortgage rates around 5 percent and an $8,000 federal tax credit for first-time buyers. As a result of these mixed feelings, some buyers have been backing out of deals after making an offer, she said.

Joseph Boreale, broker at Weichert Realtors in Wayne, said sales have been steady in his office over the past year, despite the recession. Higher-priced homes are not moving as quickly as lower-priced homes that attract first-time buyers, he said. "Anything under $500,000 is selling," he said. "Savvy sellers who know how to price their homes are selling their homes."

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