Mixed Home Price Performance Continues in Metro Areas, One-Third Show Gains

May 13, 2008, 01:00 ET from National Association of Realtors

    WASHINGTON, May 13 /PRNewswire/ -- One out of three the metropolitan
 areas in the United States showed rising home prices in the first quarter,
 with only a small number of jumbo loan originations and higher foreclosures
 resulting in greatly mixed conditions around the country, according to the
 latest quarterly survey by the National Association of Realtors(R).
     In the first quarter, 48 out of 149 metropolitan statistical areas[1]
 showed higher median existing single-family home prices from a year
 earlier, 100 had price declines and one was unchanged. NAR's track of metro
 area home prices dates back to 1979.
     NAR President Richard Gaylord, a broker with RE/MAX Real Estate
 Specialists in Long Beach, Calif., said the U.S. market is very dynamic.
 "It's more important than ever to examine what's happening with home prices
 at the city and neighborhood level," Gaylord said. "The old real estate
 mantra of 'location, location, location' is perhaps more relevant today
 than ever before. Consumers should check with Realtors(R) for local
 expertise on what's going on in their own area because conditions can vary
 considerably from one neighborhood to the next."
     A proportionately larger slowdown in home sales from a year ago in
 high-cost markets is continuing to drag down the aggregate national median
 price. In the first quarter, the median existing single-family home price
 was $196,300, down 7.7 percent from the first quarter of 2007 when the
 median price was $212,600. The national median normally is a typical market
 price, where half of the homes sold for more and half sold for less.
     Lawrence Yun, NAR chief economist, said the numbers don't tell the
 whole story. "These are highly unusual results because there were very few
 jumbo loan originations in the latest quarter, so sales are much slower in
 high-cost areas, and at the same time foreclosures related to subprime
 mortgages rose," he said. "Neighborhoods with little subprime exposure are
 holding on very well, while prices have fallen in neighborhoods with a wide
 prevalence of subprime loans because more foreclosed properties are being
 sold at discounted prices."
     Yun pointed out that homeowners with subprime loans account for less
 than 10 percent of all homeowners. "Even so, subprime mortgages account for
 more than half of all foreclosures. Sharp price declines are principally in
 neighborhoods where subprime lending has been widely prevalent," he said.
     The typical seller in the first quarter, who purchased their home six
 years ago, saw a sizable equity gain despite a price drop from a year ago.
 The median increase in value for sellers who purchased that home in the
 first quarter of 2002 is 23.8 percent, and the median home equity
 accumulation is $37,700.
     "The typical home buyer today plans to own that property for 10 years,
 and with that kind of long-term view most people will do quite well,"
 Gaylord said. "Inventories have stabilized and mortgage availability is
 beginning to improve, so we expect overall prices to go positive during the
 second half of the year."
     In the first quarter, the largest single-family home price increase was
 the Binghamton, N.Y., area, where the median price of $109,700 rose 11.8
 percent from a year ago. Next was Peoria, Ill., at $119,000, up 10.4
 percent from the first quarter of 2007, followed by the Spartanburg, S.C.,
 area, where the first-quarter median price increased 10.1 percent to
     Median first-quarter metro area single-family home prices ranged from a
 very affordable $65,400 in the Saginaw-Saginaw Township North area of
 Michigan, to nearly 12 times that amount in the San Jose-Sunnyvale-Santa
 Clara area of California, where the median price was $780,000. The second
 most expensive area was San Francisco-Oakland-Fremont, at $701,700,
 followed by Honolulu at $620,000.
     Other affordable markets include the Youngstown-Warren-Boardman area of
 Ohio and Pennsylvania at $67,700, and Decatur, Ill., with a first-quarter
 median price of $79,400.
     In the condo sector, metro area condominium and cooperative prices -
 covering changes in 55 metro areas - showed the national median
 existing-condo price was $216,900 in the first quarter, down 3.0 percent
 from $223,700 in the first quarter of 2007. Twenty-three metros showed
 annual increases in the median condo price, 31 areas had price declines and
 one was unchanged.
     The strongest condo price increases were in Bismarck, N.D., where the
 first quarter price of $124,900 rose 36.4 percent from a year earlier,
 followed by the New Orleans-Metairie-Kenner area of Louisiana, at $170,500,
 up 15.3 percent, and Wichita, Kan., where the median condo price of
 $106,600 rose 11.7 percent from the first quarter of 2007.
     Metro area median existing-condo prices in the first quarter ranged
 from $106,600 in Wichita to $546,700 in the San Francisco-Oakland-Fremont
 area. The second most expensive condo market reported was Los Angeles-Long
 Beach-Santa Ana, at $343,700, followed by the New York-Wayne-White Plains,
 area of New York and New Jersey at $333,800.
     Other affordable condo markets include the Indianapolis area at
 $110,000 in the first quarter, and Syracuse, N.Y., at $111,100.
     Total state existing-home sales, including single-family and condo,
 were at a seasonally adjusted annual rate[2] of 4.95 million units in the
 first quarter, down 0.9 percent from an upwardly revised 5.00 million in
 the fourth quarter, and are 22.2 percent below a 6.36 million-unit pace in
 the first quarter of 2007.
     According to Freddie Mac, the national average commitment rate on a
 30-year conventional fixed-rate mortgage fell to 5.88 percent in the first
 quarter from 6.23 percent in the fourth quarter; the rate was 6.22 percent
 in the first quarter of 2007.
     Regionally, the median existing single-family home price in the
 Northeast rose 3.2 percent to $280,000 in the first quarter from the same
 period in 2007. After Binghamton, the strongest price increase in the
 Northeast was in Elmira, N.Y., at $82,500, up 9.6 percent from the first
 quarter of 2007, followed by Glens Falls, N.Y., with a median price of
 $163,100, up 7.7 percent.
     In the South, the median existing single-family home price was $164,200
 in the first quarter, down 7.5 percent from a year earlier. After
 Spartanburg, the strongest price increases in the South were three areas in
 Texas: El Paso, at $134,600, up 8.5 percent from a year ago, followed by
 the Amarillo area with an 8.2 percent gain to $122,200, and Beaumont-Port
 Arthur, at $122,900, up 6.1 percent.
     The median existing single-family home price in the Midwest declined
 7.9 percent to $142,700 in the first quarter from the same period in 2007.
 After Peoria, the strongest metro price increases in the Midwest were in
 the Decatur area, where the median price of $79,400 was 4.2 percent higher
 than a year ago, and Springfield, Ill., at $172,200, also up 4.2 percent.
 Next was the Wichita, Kansas, area, at $112,700, up 4.0 percent from the
 first quarter of 2007.
     In the West, the median existing single-family home price was $296,300
 in the first quarter, which is 12.3 percent below a year ago. "This is the
 area hardest hit by the slowdown in jumbo mortgage loan origination, which
 is just now starting to improve," Yun noted.
     The strongest metro price increase in the West was in the Yakima,
 Wash., area, at $148,400, up 9.0 percent from a year ago, followed by
 Farmington, N.M., at $190,000, up 6.3 percent, and the Salt Lake City area,
 at $225,700, up 3.5 percent from the first quarter of 2007.
     The National Association of Realtors(R), "The Voice for Real Estate,"
 is America's largest trade association, representing 1.2 million members
 involved in all aspects of the residential and commercial real estate
     [1]Areas 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 area will be included in the condo price report.
     Tables of metropolitan area median prices, percent changes and some
 historic data are available at the site below - under Research click on
 Housing Statistics, then scroll down the center to Metropolitan Area
     [2]The 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
     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
     Tables of state resale rates, percent changes and some historic data
 are available at the site below under Research - click on Housing
 Statistics, then scroll down the center to State Existing-Home Sales.
     Second quarter metro area home price and state resale data will be
 released August 14.
     Information about NAR is available at www.realtor.org. This and other
 news releases are posted in the News Media section. Statistical data in
 this release, other tables and surveys also may be found by clicking on
     REALTOR(R) is a registered collective membership mark which may be used
 only by real estate professionals who are members of the NATIONAL
 ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not
 all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.

SOURCE National Association of Realtors