U.S. Real Estate Prices Rise 10% in First Quarter

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Price appreciation for condos lags that of single-family homes Monday, May 15, 2006 Inman News

About 40 percent of U.S. metropolitan statistical areas tracked by the National Association of Realtors had double-digital annual existing-home price increases from first-quarter 2005 to first-quarter 2006, the trade group reported today, and 16 metro areas had price declines. The national median existing single-family home price was $217,900 in the first quarter, up 10.3 percent from first-quarter 2005 when the median price was $197,600. 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 2005, the annual rate of home-price appreciation was 13.6 percent. Metro area condominium and cooperative prices, covering changes in 56 markets, show the national median existing condo price was $224,100 in the first quarter, up 5.2 percent from a year earlier. Twenty-seven metros showed double-digit annual gains in the median condo price, and five areas had declines, the association reported. The largest single-family home price increase was in the Phoenix-Mesa-Scottsdale area of Arizona, where the first-quarter price of $268,300 rose 38.4 percent from a year ago. Next was Orlando, Fla., at $260,500, up 34 percent from the first quarter of 2005. Gainesville, Fla., with a first-quarter median price of $210,100, increased 31.9 percent in the last year. Median first-quarter metro-area single-family prices ranged from $52,500 in Danville, Ill., to 14 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $746,800. The second most expensive area was the San Francisco-Oakland-Fremont area at $720,400, followed by the Anaheim-Santa Ana-Irvine area (Orange County, Calif.), at $712,600. Other low-cost markets include, Decatur, Ill., the second least costly metro, at $80,000, and the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, with a first-quarter typical resale home price of $81,100. In the condo sector, the strongest gains were in the Phoenix-Mesa-Scottsdale area, where the first-quarter price of $179,600 rose 38 percent from a year ago. In the Honolulu area, the median condo price of $309,000 rose 34.9 percent from the first quarter of 2005, while Miami-Fort Lauderdale-Miami Beach, at $221,500, increased 31.4 percent. The condo price series will be expanded in the future as more data becomes available. Metro-area median existing condo prices ranged from $97,400 in Bismark, N.D., to $615,300 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Los Angeles-Long Beach-Santa Ana, at $404,600, followed by the San Diego-Carlsbad-San Marcos area of California at $382,200. Other low-cost condo markets include Greensboro-High Point, N.C., at $108,000, and Dallas-Fort Worth-Arlington, at $112,800, the association reported. Regionally, the strongest increase in the median existing single-family home price was in the West, where the price rose 12 percent to $344,000 during the first quarter. After Phoenix-Mesa-Scottsdale, the strongest increase in the West was in Spokane, Wash., at $172,100, up 26.3 percent, followed by Eugene-Springfield, Ore., at $223,600, up 25.3 percent from the first quarter of 2005, and the Tucson area, at $248,600, up 24.9 percent. In the Midwest, the first-quarter median existing single-family home price of $158,800 rose 6.7 percent from a year earlier. The strongest metro increase in the Midwest was in Waterloo-Cedar Falls, Iowa, where the median price of $109,700 was 26.8 percent higher than the first quarter of 2005. Next was Decatur, Ill., up 14.3 percent, and Cedar Rapids, Iowa, at $134,600, up 13.4 percent in the last year. In the Northeast, the median resale single-family home price during the first quarter was $285,200, up 6.6 percent from a year ago. The strongest increase in the region was in Elmira, N.Y., at $88,500, up 18.8 percent from the first quarter of 2005, followed by Trenton-Ewing, N.J., with a median price of $264,900, up 17.5 percent, and Atlantic City, N.J., at $251,700, up 15.8 percent. In the South, the median existing single-family home price was $179,700 in the first quarter, up 6.6 percent from a year earlier. After the Orlando and Gainesville areas of Florida, the strongest increase in the South was in Ocala, Fla., at $159,800, up 30.8 percent from the first quarter of 2005. Next was the Virginia Beach-Norfolk-Newport News area of Virginia and North Carolina, where the first quarter median price of $221,100 was 27.1 percent higher than a year ago, and Deltona-Daytona Beach-Ormond Beach area of Florida, at $212,600, up 25.4 percent. NAR chief economist David Lereah said in a statement, "With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices," he said. "By the time we report second-quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range. Consumers generally can expect normal price appreciation for the foreseeable future, providing solid returns over time." Thomas M. Stevens, NAR president and senior vice president of NRT Inc., said inventories have picked up more strongly in the condo sector. "Although we continue to have areas of hot growth, we're finding more broadly balanced conditions across the country in the condo market." The national condo price is higher than the median single-family home price because there is a high concentration of condos in the most expensive metropolitan areas. Within a given area, the typical single-family home costs more than the median condo price, the association reported. National and regional quarterly prices have been revised back through 1989; the only revision to the metro price series is the normal annual revision for 2005 with revised fourth quarter data, the Realtor group reported. The fixed reporting sample of representative multiple listing services for national and regional data has been updated to reflect geographic changes over time. In addition, regional weights have been updated and aligned to the 2000 Census, but changes in price patterns are consistent with previously reported data, the association also announced. "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," the association also reported. NAR began publication of metropolitan area median single-family home prices in 1982; the metro-area condo price series was launched earlier this year when fourth-quarter 2005 data was reported. ***