| WASHINGTON (May 12, 2005) – A growing number of
metropolitan areas showed double-digit annual increases in median
existing-home prices in the first quarter, with an upward trend in
overall price appreciation, according to the latest survey by National
Association of Realtors®.
The association’s first-quarter metro area home price report,
covering changes in 136 metropolitan statistical areas,* shows a record
of 66 areas with double-digit annual increases in median existing
single-family home prices and only six areas posting modest price
declines. The previous record was 62 metros showing double-digit price
appreciation in the fourth quarter of 2004.
The national median existing single-family home price was $188,800 in
the first quarter, up 9.7 percent from the first quarter of 2004 when
the median price was $172,100. The median is a typical market price
where half of the homes sold for more and half sold for less. In the
fourth quarter of 2004, the national annual rate of home-price
appreciation was 8.8 percent.
David Lereah, NAR’s chief economist, points to the tight supply of
homes available for sale. “We simply don’t have enough homes on the
market to meet demand,” he said. “Low mortgage interest rates are
drawing new households into the market, but some are disappointed by
their inability to find a home that meets their needs. We think the
supply situation may improve next year when interest rates are expected
to be higher – that should result in a lessening of demand and cooler
price appreciation.”
Three Florida metros led the nation in price growth. The strongest
price increase was in Bradenton, where the first quarter price of
$275,100 rose 45.6 percent from a year earlier. Next was Sarasota, at
$326,300, up 36.0 percent from the first quarter of 2004. Third was the
West Palm Beach-Boca Raton-Delray Beach area, with a first quarter
median price of $362,800, up 35.9 percent in the last year.
NAR President Al Mansell, CEO of Coldwell Banker Residential
Brokerage in Salt Lake City, said buyers need to do their homework. “If
home buyers find themselves in a market where price-bidding is common,
they need to have a handle on comparable market values and avoid the
temptation to take shortcuts,” he said. “It’s especially important
to understand loan terms – a real estate professional can help you to
avoid riskier products, in addition to walking you through the
transaction process.”
In the small number of areas with price declines, none had previously
experienced rapid price growth. Generally, these are lower-cost markets
experiencing one or both of the conditions necessary for price softness
– local economic weakness, mainly in jobs, or a large supply of homes
available in the local market; typically, these are temporary in nature.
Median first-quarter metro area resale prices ranged from $82,400 in
Youngstown-Warren, Ohio, to more than eight times that amount in the San
Francisco Bay area where the median price was $689,200. The second most
expensive area in the United States was Anaheim-Santa Ana (Orange Co.,
Calif.) at $656,900, followed by San Diego at $584,100.
Other low-cost markets include Waterloo-Cedar Falls, Iowa, the second
least-costly area, at $86,500, and Beaumont-Port Arthur, Texas, with a
first-quarter typical resale home price of $90,000.
Regionally, the strongest increase was in the West where the median
existing single-family home price was $282,900 during the first quarter,
up 16.9 percent from a year ago. The strongest increase in the region
was in Riverside-San Bernardino, Calif., where the median price of
$343,400 rose 36.2 percent from a year earlier, followed by the Las
Vegas area, at $291,000, up 29.4 percent, and Sacramento, at $352,900,
up 26.9 percent from the first quarter of 2004. Fourteen other Western
metro areas also experienced double-digit annual price gains including
Honolulu, Phoenix, Los Angeles, San Diego, San Francisco, Anaheim-Santa
Ana and Seattle.
In the Northeast, the median resale price during the first quarter
was $245,700, rising 14.0 percent from a year earlier. The strongest
increase in the region was in the Atlantic City, N.J., area, at
$217,400, up 23.2 percent from the first quarter of 2004, followed by
Monmouth-Ocean, N.J., with a median price of $358,500, up 20.3 percent,
and the Middlesex-Somerset-Hunterdon area of New Jersey, at $381,400, up
18.2 percent. Twelve other Northeastern metros had double-digit price
gains including Bergen-Passaic, N.J.; the New York City area; the
Albany-Schenectady-Troy area of New York; Nassau-Suffolk, N.Y.;
Hartford, Conn.; and Boston.
In the Midwest, the first-quarter median existing-home price of
$148,800 increased 7.8 percent from the same period in 2004. The
strongest increase in the Midwest was in Springfield, Mo., where the
median price of $126,400 was 15.4 percent higher than the first quarter
of 2004. Next came Rockford, Ill., at $129,300 in the first quarter, up
14.0 percent, and the Champaign-Urbana-Rantoul area of Illinois, at
$120,700, up 12.9 percent in the last year. Wichita, Kansas;
Aurora-Elgin, Ill.; South Bend-Mishawaka, Ind.; Springfield, Ill.; and
Green Bay, Wis., also had double-digit gains.
In the South, the typical existing single-family home price rose 6.6
percent to a median of $166,600 in the first quarter from a year
earlier. After the Bradenton, Fla., area, Sarasota, Fla., and the West
Palm Beach-Boca Raton-Delray Beach area, the strongest increase in the
South was in the Orlando area, at $194,400, up 28.7 percent from the
first quarter of 2004. Next was Miami-Hialeah, at $315,700, up 28.4
percent, and Ocala, Fla., where the first quarter median price of
$122,200 was 27.0 percent higher than a year ago. Eighteen other
Southern metro areas experienced double-digit increases in their median
price including the Ft. Myers-Cape Coral-Punta Gorda area of Florida;
the Washington, D.C., area; Norfolk-Virginia Beach-Newport News, Va.;
Richmond-Petersburg, Va.; and Tampa-St. Petersburg-Clearwater.
*Areas are generally metropolitan statistical areas (MSAs) as defined
by the U.S. Office of Management and Budget. They include the specified
city or cities and surrounding suburban areas. 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. NAR began publication of
metropolitan area median home prices in 1982.
Beginning in the second quarter of 2005, NAR will adopt updated
definitions for MSAs and expand the number of areas covered in the
report, including historic data with revisions.
Source: The National Association Of
Realtors
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