Metro Area Home Prices Remain Hot in Most Markets, Says NAR

5/14/2003

From: Walter Molony, 202-383-1177; E-mail: wmolony@realtors.org Lucien Salvant, 202-383-1176; E-mail: lsalvant@realtors.org both of the National Association of Realtors(r)

WASHINGTON, May 14 -- Most metropolitan areas experienced above-average appreciation in median existing-home prices in the first quarter, according to the latest survey by National Association of Realtors(r).

The association's first-quarter metro area home price report, covering changes in 117 metropolitan statistical areas,(note 1) shows 31 areas with double-digit annual increases in median existing-home prices and only eight areas posting generally small declines. Most markets, 72, increased more than two percentage points above the rate of inflation, which is the high end of normal price appreciation.

NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said fewer markets are showing very sharp price gains. "In the fourth quarter, some 39 metros were experiencing double-digit price increases, the most on record," she said. "The good news is we're starting to see a little slowdown, which will be healthier for the market in the long run."

The national median existing-home price was $161,500 during the first quarter, up 7.0 percent from the first quarter of 2002 when the median price was $151,000. The median is a typical market price where half of the homes sold for more and half sold for less.

David Lereah, NAR's chief economist, said price gains should gradually ease. "The annual rate of national price appreciation has slowed from 8.4 percent in the fourth quarter, but it remains above historic norms," he said. "We still have tight housing inventories in many areas, which is continuing to apply pressure to market prices."

"We're expecting a more balanced housing market this year between buyers and sellers. Even so, the market generally continues to favor sellers," Lereah said. "Overall, home prices should rise 5.1 percent in 2003."

The strongest price increases were in the Philadelphia area, where the first quarter median price of $153,400 was 25.7 percent above a year earlier, and in Providence, R.I., at $213,200, also 25.7 percent above the first quarter of 2002. Next was the Melbourne-Titusville-Palm Bay area of Florida, with a first-quarter median price of $124,900, up 25.4 percent in the last year.

Median first-quarter metro resale prices ranged from $80,700 in Waterloo-Cedar Falls, Iowa, to more than six times that amount in the San Francisco Bay area, which was $509,000. The second most expensive area was Anaheim-Santa Ana (Orange Co., Calif.), at $448,400, followed by Boston at $413,500.

Other low-cost markets include Beaumont-Port Arthur, Texas, the second least-costly area at $83,400, and South Bend-Mishawaka, Ind., with a first-quarter typical resale home price of $83,800.

Regionally, the strongest increase was in the Northeast where the median resale price during the first quarter was $178,500, rising 16.7 percent from a year earlier. After Philadelphia and Providence, the strongest percentage increase in the region was in Trenton, N.J., where the typical resale price was $191,700, up 24.0 percent from a year ago, followed by the Monmouth-Ocean, N.J., with a median price of $270,400, which was 23.4 percent higher than the first quarter of 2002. Next came New Haven-Meriden, Conn., with a first quarter median price of $211,400, up 21.8 percent in the last year, and Bergen-Passaic, N.J., at $358,300, up 21.1 percent. Five other Northeastern metros also show double-digit median price increases, including Atlantic City, N.J.; Nassau-Suffolk, N.Y.; Portland, Maine; the New York City area; and Hartford, Conn.

In the West, the first-quarter median existing-home price was $217,200, up 8.0 percent from a year ago. The strongest increase in the region was in the Sacramento area, where the median price of $230,000 rose 25.3 percent from a year earlier. Anaheim-Santa Ana rose 20.5 percent, and San Diego, with a typical resale price of $389,100, was up 19.5 percent. Riverside-San Bernardino, Calif., at $194,800, was up 18.3 percent from the first quarter of 2002, while Los Angeles-Long Beach increased 16.2 percent to $307,900. Honolulu, with a median price of $350,000, rose 12.9 percent from a year earlier, while Las Vegas, at $171,300, was up 11.9 percent.

In the South, the median existing-home price of $152,200 rose 7.5 percent from the first quarter of 2002. After the Melbourne-Titusville-Palm Bay area, the strongest increase in the region was in Wilmington, Del., where the first-quarter median price of $160,700 was up 18.0 percent in the last year. In the Miami-Hialeah area, the median price of $202,200 rose 16.1 percent, while Baltimore, at $190,000, and Fort Lauderdale-Hollywood-Pompano Beach, Fla., at $208,700, both rose 15.2 percent from a year earlier. Four other metro areas in the South experienced double-digit price increases, including Sarasota and Jacksonville, Fla.; the Washington, D.C., area; and Richmond-Petersburg, Va.

In the Midwest, the median resale home price of $134,700 during the first quarter was 4.1 percent higher than the same period in 2002. The strongest increase in the region was in the Champaign-Urbana-Rantoul area of Illinois, where the median price of $111,900 was 17.7 percent higher than the first quarter of 2002. Next was Springfield, Ill., at $93,500 in the first quarter, up 11.4 percent in the last year. This was followed by Chicago, where the median price of $220,000 was 11.1 percent higher than the same quarter a year ago; Rockford, Ill., at $108,600, rose 10.9 percent.

The National Association of Realtors(r), "The Voice for Real Estate," is America's largest trade association, representing approximately 880,000 members involved in all aspects of the residential and commercial real estate industries.

------ NOTE (1) Areas are generally metropolitan statistical areas (MSAs) as defined by the U.S. Office of Management and Budget. They include the specified city or cities and surrounding suburban areas. 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.

Tables of metropolitan area median prices, percent changes and some historic data are available at http://realtor.org/research - click on Existing Home Sales, then Metropolitan Area Prices.

Information about NAR is available at http://realtor.org. This and other news releases are posted in the Web site's "News Media" section under NAR News Releases. Statistical data and surveys may be found at http://realtor.org/research.

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.