Property ManagementHousing Gains Easing, But Still Strong, Says NAR
Most metropolitan areas continued to experience strong price gains during the
third quarter, but with slightly fewer areas rising at double-digit rates,
according to the latest survey by National Association of Realtors®.
The association"s third-quarter metro area home price report, covering
changes in 123 metropolitan statistical areas,* shows 29 areas with
double-digit annual increases in median existing-home prices and only four
areas posting small declines. In the second quarter, 35 metro areas experienced
double-digit annual price increases.
Dr. David Lereah, NAR"s chief economist, said the price gains reflect a
continuing shortage of homes available for sale in many areas during the third
quarter. "The good news now is that the imbalance that existed between buyers
and sellers has stabilized in most areas, while in others it has become more of
a buyer"s market," he said.
The national median existing-home price was $151,200 during the third quarter,
up 6.0 percent from the third quarter of 2000 when the median price was
$142,700. The median is the midpoint, which is a typical market price where
half of the units sold for more and half sold for less. "This home-price gain
remains above historic norms, with the median price rising 5.3 percentage
points above the estimated rate of inflation, which was only 0.7 percent in the
third quarter," Lereah said. The normal price increase is one-to-two percentage
points above inflation.
NAR President Martin Edwards, Jr. said the rate of price increase is
expected to slow. "Given the overall economic slowdown, we"re expecting the
median existing-home price to rise only 3.4 percent next year. This will take
some of the pressure off of markets which have been rising very rapidly -
combined with the drop in mortgage interest rates, it is creating opportunities
for some people who were priced-out of the market earlier this year," he said.
Mortgage interest rates have fallen to the lowest level since the 1960"s.
The strongest increase was in the Nassau-Suffolk area of New York, with a
median price of $263,300, up 22.6 percent from the third quarter of 2000. Next
came the Monmouth-Ocean area of New Jersey at $217,000, up 21.4 percent from
the third quarter of 2000. Third was Worcester, Mass., where the third quarter
median price of $163,600 rose 21.3 percent from a year earlier.
Median third quarter metro resale prices ranged from $83,900 in
Buffalo-Niagara Falls to nearly six times that amount in the San Francisco Bay
area, where the median price was $474,100. The second most expensive area was
Boston at $367,300, followed Anaheim-Santa Ana (Orange Co., Calif.), with a
third quarter median resale price of $365,400.
Other low-cost markets include Saginaw-Bay City-Midland, Mich., the second
least-costly area at $86,700, and Waterloo-Cedar Falls, Iowa, with a third
quarter typical resale home price of $87,000.
Regionally, the strongest increase during the third quarter was in the
Northeast, where the median resale price of $149,200 rose 6.9 percent from a
year earlier. After Nassau-Suffolk, Monmouth-Ocean and Worcester, the strongest
increase in the region was in Providence, with a third quarter median price of
$163,800, up 18.3 percent in the last year, followed by Portland, Maine, where
the typical resale price of $166,200 rose 15.3 percent from a year ago. Four
other metros in the Northeast also showed double-digit annual median price
gains in the third quarter.
In the South, the median existing-home price of $140,200 rose 6.7 percent
from the third quarter of 2000. The strongest increase in the region was in Ft.
Meyers-Cape Coral, Fla., where the median price of $115,900 was 20.1 percent
higher than a year earlier. In Ft. Lauderdale-Hollywood-Pompano Beach, the
third-quarter median price of $181,500 was up 19.3 percent in the last year,
while Daytona Beach, at $101,100, rose 18.0 percent from a year earlier, and
Washington, D.C., with a typical resale price of $221,600, rose 17.4 percent.
Six other metro areas in the South experienced double-digit price increases.
The third quarter median existing-home price in the West was $197,700, up
6.4 percent from a year ago. The highest increase in the region was in
Sacramento, with a median price of $177,000, up 18.4 percent from the third
quarter of 2000.
Riverside-San Bernardino, Calif., at $159,700, was up 14.6 percent from the
third quarter of 2000. San Diego, with a third quarter median price of
$312,200, also rose 14.6 percent from a year earlier, while Anaheim-Santa rose
13.5 percent from a year ago. Denver and Los Angeles-Long Beach also
experienced double-digit price gains.
In the Midwest, the median resale home price of $134,200 during the third
quarter was 4.4 percent higher than the same period in 2000. The strongest
increase in the region was in Chicago, with a median price of $211,800, up 13.9
percent in the last year. The next highest increase was in Lincoln, Neb., where
the median price of $123,600 was 12.7 percent higher than the third quarter of
2000, followed by Springfield, Ill., at $96,700, up 11.0 percent in the last
year; Champaign-Urbana-Rantoul, Ill., with a third-quarter median of $106,600,
rose 10.5 percent from a year ago.