Median third-quarter metro area home prices ranged from $72,800 in Danville, Ill., to nearly 10 times that amount in the San Francisco-Oakland-Fremont area of California where the median price was $721,900, according to National Association of Realtors statistics.
The second most expensive area in the United States was Anaheim-Santa Ana in Orange County, Calif., at $710,700, followed by the Honolulu area and San Diego-Carlsbad-San Marcos, Calif., which tied at $615,000, NAR announced today.
Other low-cost markets include, Elmira, N.Y., the second least-costly metro, at $77,100, and Decatur, Ill., with a third-quarter typical resale home price of $85,500.
The strongest price increase in the nation was in the Phoenix-Mesa-Scottsdale area of Arizona, where the third-quarter price of $268,000 rose 55.2 percent from a year earlier. Next was Orlando, Fla., at $261,300, up 44.8 percent from the third quarter of 2004. Cape Coral-Fort Meyers, Fla., with a third-quarter median price of $277,600, was up 42.5 percent in the last year.
The areas experiencing price declines were lower-priced markets, with one or both of the conditions necessary for price softness – local economic weakness, primarily in jobs, or a large supply of homes for sale in the local area.
NAR’s third-quarter median existing single-family home price survey, which covers changes in 147 metropolitan statistical areas, shows 69 areas with double-digit annual price increases. Six metros had small price declines.
The national median existing single-family home price was $215,900 in the third quarter, up 14.7 percent from the third quarter of 2004 when the median price was $188,200. The median is a typical market price where half of the homes sold for more and half sold for less. Ninety-seven metros – two-thirds of the total – experienced increases greater than the U.S. historic average of 6.4 percent.
David Lereah, NAR’s chief economist, said, “These historically high home-price gains are the simple result of more buyers than sellers in the market. The good news is that inventory levels are improving, and housing supply will come close to buyer demand in 2006. In other words, we expect a healthy and more balanced market next year.”
Since 1968, home prices generally have risen between one percentage point to two percentage points faster than the overall rate of inflation; the historic average price gain appears high relative to inflation because there was a period of rapid inflation in the U.S. during the 1970s and early 1980s.
NAR President Thomas M. Stevens, said that over the next year, “Improvements in inventory in most areas should take pressure off of home buyers to make snap decisions, or find themselves in a competitive bidding situation. This calmer real estate market will create a more level environment for buyers in weighing options to invest in the American dream of home ownership. Sellers will enjoy very healthy gains on the value of their home, but should expect annual increases to be much closer to historic levels going forward.”
Regionally, the strongest increase was in the West where the median existing single-family home price rose 18.8 percent over the last year to $322,000 during the third quarter. After Phoenix-Mesa-Scottsdale, the strongest increase in the West was in the Tucson area where the median price of $242,300 rose 34.7 percent from a year earlier, followed by Honolulu, up 31.1 percent, and Eugene-Springfield, Ore., at $208,900, up 25.9 percent from the third quarter of 2004.
In the Northeast, the median resale home price during the third quarter was $249,300, up 13.2 percent from a year earlier. The strongest increase in the region was in the Glens Falls, N.Y., area, at $160,000, up 25.4 percent from the third quarter of 2004, followed by Kingston, N.Y., with a median price of $259,300, up 19.8 percent, and the Philadelphia-Camden-Wilmington area of Pennsylvania, New Jersey, Delaware and Maryland, at $230,600, up 19.0 percent.
In the Midwest, the third-quarter median existing-home price of $173,300 rose 13.1 percent from the same period in 2004. The strongest increase in the Midwest was in the Waterloo-Cedar Falls area of Iowa, where the median price of $111,000 was 14.8 percent higher than the third quarter of 2004. Next was Bloomington-Normal, Ill., at $170,900, up 14.5 percent, and Rockford, Ill., at $120,400, up 13.7 percent in the last year.
In the South, the typical existing home price was $183,500 in the third quarter, up 7.7 percent from a year earlier. After the Orlando and Cape Coral-Fort Meyers areas of Florida, the strongest increase in the South was in the Deltona-Daytona Beach-Ormond Beach, Fla., area, at $208,200, up 33.8 percent from the third quarter of 2004. Next was Palm Bay-Melbourne-Titusville, Fla., where the third quarter median price of $212,800 was 33.6 percent higher than a year ago, and Ocala, Fla., at $151,500, up 31.9 percent.
The National Association of Realtors is the nation’s largest trade association, representing about 1.2 million members.
Metropolitan statistical areas used in the report are defined by the U.S. Office of Management and Budget. A list of counties included in these definitions is available at: http://www.census.gov/population/estimates/metro-city/0312msa.txt.
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, NAR reported.
Beginning with the report for the fourth quarter, to be released Feb. 15, 2006, NAR will include data on a news series for metropolitan area median condo prices. Initially, data for about 50 metros – including some historic data – will be reported. The number of MSAs covered for condo prices will be expanded over time.
***
Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.
