Metro Area Home Prices Show Strong Gains Across Country, NAR
May 14, 2002
WASHINGTON? Most metropolitan areas experienced moderate to strong gains in median existing-home prices in the first quarter, according to the latest survey by National Association of Realtors®.
The association's first-quarter metro area home price report, covering changes in 120 metropolitan statistical areas,* shows 30 areas with double-digit annual increases in median existing-home prices and 18 areas posting generally small declines.
NAR President Martin Edwards Jr. said the report reflects historically low inventories of homes available for sale in most areas. "The lean supply of homes on the market, against a backdrop of record sales activity, means we are once again are seeing a situation of multiple bids on desirable properties," he said. "This strong demand is the primary factor in sharper home price increases. In some areas there is almost no inventory in the higher prices ranges, which is causing an artificial dip in the median price for those markets." Edwards is a partner in Colliers Wilkinson & Snowden Inc., Memphis, Tenn.
The national median existing-home price was $150,900 during the first quarter, up 8.0 percent from the first quarter of 2001 when the median price was $139,700. The median is the midpoint, which is a typical market price where half of the units sold for more and half sold for less.
David Lereah, NAR's chief economist, said affordability in most areas remains favorable despite the rise in home prices. "Although low interest rates are the most important factor in housing affordability, the other components ? income and price ? remain in balance," he said.
"We expect we'll be able to preserve the balance between home prices and family income in the future," Lereah said. "Over the last 25 years, the ratio of median home price to median family income has been in the range of 2.5 to 3.0. Even with the run-up in home prices during the first quarter the ratio was 2.9, so it's staying within the historical range."
The strongest price increase was in Nassau-Suffolk, N.Y., where the first quarter median price of $287,500 was 26.5 percent above a year earlier. Next came Worcester, Mass., at $170,300, up 25.2 percent from the first quarter of 2001. Third was Mobile, Ala., with a first quarter median price of $115,400, up 21.9 percent in the last year.
Median first-quarter metro resale prices ranged from $76,800 in Beaumont-Port Arthur, Texas, to more than six times that amount in the San Francisco Bay area, which was $482,300. The second most expensive area was Anaheim-Santa Ana (Orange Co., Calif.), at $372,000, followed by Boston at $358,000.
Other low-cost markets include Syracuse, N.Y., the second least-costly area at $80,300, and Peoria, Ill., with a first-quarter typical resale home price of $81,200.
Regionally, the strongest increase was in the Midwest where the median resale home price of $133,900 during the first quarter was 8.2 percent higher than the same period in 2001. The strongest increase in the Midwest was in Topeka, Kan., where the median price of $91,000 was 18.5 percent higher than the first quarter of 2001. Next was Minneapolis-St. Paul, at $173,000 in the first quarter, up 14.6 percent in the last year. This was followed by Milwaukee, where the median price of $159,000 was 11.7 percent higher than the same quarter a year ago.
The first-quarter median existing-home price in the West was $197,700, up 7.7 percent from a year ago. The strongest increase in the region was in the Los Angeles-Long Beach area, where the first-quarter median price of $265,000 rose 17.7 percent from a year earlier. Tucson, Ariz., at $137,600, was up 17.4 percent from the first quarter of 2001, while Sacramento increased 15.0 percent to $185,700. Four other metro areas in the West experienced double-digit price increases.
In the South, the median existing-home price of $139,900 rose 7.4 percent from the first quarter of 2001. After Mobile, the strongest increase in the region was in the Washington, D.C., area, where the first-quarter median price of $229,100 was up 19.8 percent in the last year. In Ft. Lauderdale-Hollywood-Pompano Beach, Fla., the median price of $181,200 rose 15.1 percent, while West Palm Beach-Boca Raton-Delray Beach, Fla., at $159,100, rose 14.1 percent from a year earlier. Seven other metro areas in the South experienced double-digit price increases.
The median resale price in the Northeast during the first quarter was $150,100, rising 4.7 percent from a year earlier. After Nassau-Suffolk and Worchester, the strongest increase in the region was in Atlantic City, N.J., where the typical resale price was $133,700, up 21.8 percent from a year ago, followed by the New York-Northern New Jersey-Long Island area, with a median price of $285,600, which was 20.9 percent higher than the first quarter of 2001. Next came Providence, R.I., with a first quarter median price of $169,600, up19.3 percent in the last year. Four other Northeastern metros also show double-digit median price increases.
Source: National Association of Realtors®.