The National Association of Realtors® (NAR) has insisted for years, and insisted adamantly since the "bubble" started to burst, that real estate, like politics, is local. The quarterly survey of home prices that NAR released on Thursday proves this point and also indicates that, while the housing market is grim in some parts of the country it is doing quite well in others.
The survey which covers the fourth quarter of 2007 showed that 73 of the 150 metropolitan areas in the survey continued to show rising median prices for existing single-family homes.
11 areas actually showed double-digit annual gains and another 12 had increases of 6 percent or more. 77 Areas had price declines and 16 of those lost values in the double digits.
Still, in spite of the fact that the market is holding up well in much of the country, median prices for the country as a whole and for each of the four regions were down from the fourth quarter of 2006. The median price for the country declined 5.8 percent from $219,000 to $206,200. The West, which also had the highest prices in the country, took the biggest hit. The median price in that region in the fourth quarter of 2006 was $355,000 but had declined 8.7 percent to $324,100 in the latest report. The Midwest, which has the lowest median price fared the best, losing only 3.2 percent to a fourth quarter price of $156,300.
The largest single-family price increase was in the Cumberland area of Maryland and West Virginia. Prices there rose 19.0 percent from a year ago to a median of $116,500. Other big winners were Yakima, Washington (18.0 percent to a median of $170,600) and Binghamton, New York where prices increased 14.8 percent to a median of $110,000.
Big losers were Lansing/East Lansing Michigan where median prices dropped 18.8 percent to $109,600; the Sacramento California MSA which lost 18.5 percent in value to $297,600; and Jackson Mississippi and Riverside/San Bernardino California each at -16.8 percent to median prices of $120,900 and $338,000 respectively.
Lawrence Yun, NAR chief economist, said disruptions in the mortgage market have played a role. "The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges. For buyers who need loans of more than $417,000, mortgage interest rates have been running more than a percentage point higher, and that has been having an obvious impact. Higher ratios of sales for more moderately priced homes are naturally dampening the national median price as well as the data for some of the more expensive markets."
NAR President Richard Gaylord said he is encouraged by the raising of Freddie Mac, Fannie Mae, and FHA conventional loan limits. "Higher limits for FHA loans, which go into effect March 14, will be a big help to first-time buyers in high-cost markets. Higher limits for conventional loans purchased by Freddie Mac and Fannie Mae will take a bit longer - when they become available, high-income, creditworthy borrowers in high-cost areas will have access to affordable and safer financing, and that will help unleash pent-up demand."
The NAR report also covered condominium and cooperative prices in 59 metropolitan areas. The national median price for existing condos was $221,100 in the fourth quarter, only $100 less than in the fourth quarter of 2006. Thirty-three areas showed year-over-year increases (four of these had double-digit gains) while 26 areas saw prices decline, four of those by double-digits.
Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate(2) of 4.96 million units in the fourth quarter, down 8.5 percent from 5.42 million in the third quarter, and are 20.9 percent below a 6.26 million-unit pace in the fourth quarter of 2006.
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.
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