Sales declines in 25 major metropolitan housing markets slowed during January, as the number of "motivated" sales transactions continued to drive sales volume in many of the nation's larger housing markets -- the result is that sales volume declined 6 percent year-over-year in January, compared to a 36 percent decline in the same period one year earlier. The data, released Friday morning by Radar Logic Inc., a New York-based real estate data and analytics company, suggest that "motivated" sales -- defined as sales to third parties at foreclosure auctions and sales of foreclosed homes by financial institutions and foreclosure service firms -- reflect both the raw increase in foreclosures over the last year, but also some significant demand for homes that are priced at "motivated" discounts. The growth of motivated sales, both in absolute terms and as a share of total sales, has put pressure on home prices. According to Radar Logic data, the 25-MSA composite price for motivated sales was 36 percent lower than the composite price for all other sales between January 2008 and January 2009. With motivated transactions now representing an estimated 36 percent of all real estate transactions nationally during January, up from 17 percent one year earlier, it's not hard to see why home prices continue to fall. In the year ending January 2009, the 25-MSA composite home price tracked via Radar Logic data fell 23 percent. If the proportions of motivated sales and other sales had remained unchanged at January 2008 levels, the decline in the Composite would have been closer to 19 percent, the company reported. "While it is too soon to draw specific conclusions, much of what we are seeing now is encouraging news about housing," said Michael Feder, president and CEO of Radar Logic. "There appears to be a significant increase in demand given the reduction in prices evident in many markets. As and if mortgages return to traditional loan-to-value ratios, we would expect to see stability and even recovery in many housing markets." "One notable exception is Manhattan," Feder added. "The continued withdrawal of financial service employees as buyers is beginning to have a significant impact on Manhattan condominium prices, as we have been predicting for several months." While I think Feder is correct that price declines reflect a needed correction, it's also telling that we still see such strong bifurcation of pricing trends between "motivated" real estate sales and more traditional "retail" real estate sales -- depending on your viewpoint, this could suggest further correction is yet needed, as retail sellers must eventually toe the line down to the level of "distressed" sales. Underscoring the difficulty of maintaining relatively higher prices by retail sellers, home prices declined on a year-over-year basis in 24 of the 25 MSAs tracked by Radar Logic. The largest decline was in Phoenix, where the RPX fell 36 percent between January 2008 and January 2009; Milwaukee was the only MSA to post a year-over-year increase. Home prices there increased 1 percent from January 2008 to January 2009, Radar Logic said. Read the full report. Write to Paul Jackson at