First-Time on Record - All Metro Areas Showing Home Price Gains, Reports NAR

8/13/2003

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

WASHINGTON, Aug. 13 -- For the first time since reporting began in 1982, home prices in the second quarter increased in all metropolitan areas for which data is available compared with the same period a year earlier, according to the latest survey by the National Association of Realtors(r).

The association's second-quarter metro area home price report, covering changes in 126 metropolitan statistical areas (note), shows 40 areas with double-digit annual increases in median existing-home prices and no areas with price declines.

David Lereah, NAR's chief economist, said this is the most exceptional home price survey the association has ever reported. "Normally, even in very strong sales markets, there are about a half-dozen metros somewhere in the country that for one reason or another have a temporary price decline," he said. "Not only is every market positive, but also a record number of metropolitan areas are experiencing double-digit price gains."

The national median existing-home price was $168,900 during the second quarter, up 7.4 percent from the second quarter of 2002 when the median price was $157,300. The median is a typical market price where half of the homes sold for more and half sold for less.

NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said there are simply more buyers than sellers in the market. "We have relatively lean inventories of homes available on the market in a year in which we will set a sales record," she said. "The supply-demand imbalance is the fundamental reason for the strong price gains."

Lereah said price appreciation is expected to moderate. "With a modest, gradual rise in mortgage interest rates going into next year, home sales will slow a bit and help to bring the market closer to equilibrium between buyers and sellers," he said. "This will reduce pressure on home prices and the rate of price increases should slow, but in most areas they'll still rise a little faster than historic norms."

The strongest increase was in Riverside-San Bernardino, Calif., with a median price of $212,600, up 23.5 percent from the second quarter of 2002. Next came the Providence, R.I., area at $228,900, up 23.2 percent. Third was the Los Angeles-Long Beach area, where the second quarter median price of $337,200 was 20.6 percent higher than a year earlier.

Median second-quarter metro resale prices ranged from $87,300 in Beaumont-Port Arthur, Texas, to more than six times that amount in the San Francisco Bay area, where the median price was $560,200. The second most expensive area was Anaheim-Santa Ana (Orange Co., Calif.), with a second quarter median resale price of $471,700, followed by Boston at $409,100.

Other low-cost markets include Buffalo-Niagara Falls, N.Y., the second least-costly area at $90,400, and, South Bend-Mishawaka, Ind., with a second quarter typical resale home price of $91,000.

Regionally, the strongest increase was in the Northeast where the median resale price during the second quarter was $182,500, a rise of 13.6 percent from a year earlier. After Providence, the strongest increase in the region was in the Nassau-Suffolk area of New York, where the typical resale price was $363,700, up 18.4 percent from a year ago, followed by Atlantic City, N.J., with a median price of $164,600, up 18.3 percent, and the New York City area at $350,900, up 15.5 percent. Eight other metros in the Northeast, including Philadelphia and Hartford, also show double-digit median price gains.

In the West, the median existing-home price of $233,200 was 8.6 percent above the second quarter of 2002. After Riverside-San Bernardino and Los Angeles-Long Beach, the highest increase in the region was in the Sacramento area, with a median price of $243,600, up 20.1 percent from the second quarter of 2002. Anaheim-Santa Ana rose 14.7 percent, while Honolulu, with a second quarter median price of $375,000, rose 13.6 percent from a year earlier. San Diego, Las Vegas and Reno also experienced double-digit increases.

In the Midwest, the median resale home price of $140,800 during the second quarter was 6.0 percent higher than the same period in 2002. The strongest increase in the region was in the Topeka, Kan., area, with a median price of $100,700, up 20.2 percent in the last year. The next highest increase was in Champaign-Urbana-Rantoul, Ill., where the median price of $122,700 was 14.8 percent higher than the second quarter of 2002, followed by the Davenport-Moline-Rock Island area of Iowa and Illinois at $107,200, up 14.3 percent. Four other Midwestern metros also experienced double-digit gains.

The second quarter median existing-home price in the South was $157,400, up 5.9 percent from a year ago. The strongest increase in the region was in the Knoxville, Tenn., area, where the second-quarter median price of $141,300 was up 18.7 percent from a year earlier. Next came Melbourne-Titusville-Palm Bay, Fla., at $130,100, up 16.5 percent, Daytona Beach, Fla., with a median of $122,800, an increase of 16.4 percent, and the Baltimore area at $204,200, up 16.1 percent. Nine other metro areas in the South, including Washington, D.C., Fort Lauderdale-Hollywood-Pompano Beach, Fla., and Jacksonville, Fla., experienced double-digit price increases.

The National Association of Realtors(r), "The Voice for Real Estate," is America's largest trade association, representing more than 900,000 members involved in all aspects of the residential and commercial real estate industries.

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Note: 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. 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; internal tracking for only 24 metros began in 1979 with new areas added over time. In the third quarter of 1980, all 25 available markets were positive, but that sample is not comparable to today's comparisons for 126 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.