In the fourth quarter, 134 out of 153 metropolitan statistical areas 1 showed declines in median existing single-family home prices from the same period in 2007, pulled down by active sales at the lower end that were driven by foreclosures. One area was unchanged and 18 metros reported price gains. NAR’s track of metro area home prices dates back to 1979.
Distressed sales – foreclosures and short sales – accounted for 45 percent of transactions in the fourth quarter, dragging down the national median existing single-family price to $180,100, which is 12.4 percent below the fourth quarter of 2007 when conditions were more balanced; the median is where half sold for more and half sold for less.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said homes and neighborhoods minimally impacted by foreclosures have moderate prices changes. “Distressed home sales have risen from about 38 percent of transactions in the third quarter, meaning people are responding to discounted prices and are slowly absorbing the excess inventory. Buyers clearly see value in today’s pricing,” he said.
“It has never been more important than now to work with local professionals to properly gauge local neighborhood conditions because foreclosures are heavily skewing the broader home price figures to be much lower. Big discounts are not occurring in neighborhoods with few foreclosures. A Realtor® who is knowledgeable about local conditions can counsel consumers in making sound long-term housing decisions,” McMillan said.
Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 4.70 million units in the fourth quarter, down 6.4 percent from 5.02 million units in the third quarter, and are 5.9 percent below the 5.00 million-unit pace in the fourth quarter of 2007.
Lawrence Yun, NAR chief economist, said the market is clearly depressed from job losses and consumer concerns about the economy. “Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said.
“If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun said.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to 5.86 percent in the fourth quarter from 6.32 percent in the third quarter; the rate was 6.23 percent in the fourth quarter of 2007.
The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 133.7 percent, followed by California which rose 84.7 percent, Arizona, up 42.6 percent, and Florida with a 12.5 percent increase.
“Once again, we see a pattern of strong sales gains, particularly in lower price homes, in areas with price declines resulting from foreclosures,” Yun said. “For example, in California and Florida, where distressed sales accounted for roughly two-third of all sales, the median price fell by much more as lower priced home sales far outpaced higher priced sales.”
Areas with the steepest declines in single-family home prices, more than 30 percent below the fourth quarter of 2007, include Las Vegas-Paradise, seven metro areas in California, Phoenix-Mesa-Scottsdale, and three metros in Florida. “Clearly these areas are attracting bargain hunters,” Yun added.
The largest single-family home price increase in the fourth quarter was in the Beaumont-Port Arthur area of Texas, where the median price of $132,600 rose 16.7 percent from a year ago. Next was the Bloomington-Normal, Ill., area at $159,300, up 9.6 percent from the fourth quarter of 2007, followed by Dover, Del, where the median price increased 6.5 percent to $212,500.
Median fourth-quarter metro area single-family home prices ranged from an affordable $43,900 in the Saginaw-Saginaw Township North area of Michigan to $610,000 in Honolulu. The second most expensive area was the San Jose-Sunnyvale-Santa Clara area of California, at $525,000, followed by San Francisco-Oakland-Fremont at $487,100.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $61,700 and Toledo, Ohio, at $75,600.
In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $186,000 in the fourth quarter, down 15.8 percent from the fourth quarter of 2007. Eight metros showed annual increases in the median condo price and 48 areas had declines.
The strongest condo price increases were in the Dallas-Fort Worth-Arlington area at $149,500, up 14.1 percent, followed by Toledo, where the median condo price of $153,900 rose 11.4 percent from the fourth quarter of 2007, and the Philadelphia-Camden-Wilmington area at $210,200, up 10.2 percent.
Metro area median existing-condo prices in the fourth quarter ranged from $88,500 in the Palm Bay-Melbourne-Titusville area of Florida to $391,900 in San Francisco-Oakland-Fremont. The second most expensive condo market reported was Honolulu at $315,600, followed by the New York-Wayne-White Plains area of New York and New Jersey at $292,600.
Other affordable condo markets include Las Vegas-Paradise at $91,200 in the fourth quarter, and the Sacramento-Arden-Arcade-Roseville area at $94,700.
Regionally, existing-home sales in the Northeast fell 11.9 percent in the fourth quarter to a pace of 760,000 units and are 13.9 percent below a year ago.
The median existing single-family home price in the Northeast declined 4.7 percent to $248,800 in the fourth quarter from the same period in 2007. The best gain in the region was in Pittsfield, Mass., where the median price of $206,000 rose 1.7 percent from the fourth quarter of 2007, followed by Reading, Penn., at $155,100, up 1.0 percent, and Buffalo-Niagara Falls, N.Y., where the price rose 0.8 percent to $106,200.
In the Midwest, existing-home sales dropped 9.3 percent in the fourth quarter to a pace of 1.04 million and are 12.4 percent below a year ago.
The median existing single-family home price in the Midwest fell 10.6 percent to $139,500 in the fourth quarter from the same period in 2007. After Bloomington-Normal, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $164,300 was 6.0 percent higher than a year ago, followed by Decatur, Ill., at $79,300, up 5.9 percent, and the Wichita, Kan., area, at $118,200, up 3.9 percent.
In the South, existing-home sales declined 7.3 percent in the fourth quarter to an annual rate of 1.73 million and are 13.4 percent lower than the same period in 2007.
The median existing single-family home price in the South was $158,300 in the fourth quarter, down 7.5 percent from a year earlier. After Beaumont-Port Arthur and Dover, the strongest price increase in the region was in El Paso, Texas, with a 5.3 percent gain to $140,700, followed by Jackson, Miss., at $126,600, up 4.7 percent.
Existing-home sales in the West rose 2.6 percent in the fourth quarter to an annual rate of 1.17 million and are 26.5 percent above a year ago.
The median existing single-family home price in the West was $243,200 in the fourth quarter, which is 25.1 percent below the fourth quarter of 2007. With a strong prevalence of distressed homes selling at discounted prices in the West, there were no reported metro areas in the region showing median price gains from a year earlier.
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Data tables for both metro area home prices and state existing-home sales are posted at:
www.realtor.org/research/research/metroprice. For areas not covered in the tables, contact your local association of Realtors®.
1Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. A list of counties included in MSA definitions is available at:
Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.
NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series was launched at the beginning of 2006, with several years of historic data.
Because there is a concentration of condos in high-cost metro areas, the national median condo price sometimes is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.
2The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales series in 1981.
Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.
First quarter metro area home price and state resale data will be released May 12.
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