The National Association of Realtors® (NAR) has insisted
for years, and insisted adamantly since the "bubble" started to burst, that
real estate, like politics, is local. The quarterly survey of home prices that
NAR released on Thursday proves this point and also indicates that, while the
housing market is grim in some parts of the country it is doing quite well in
The survey which covers the fourth quarter of 2007 showed that 73 of the 150
metropolitan areas in the survey continued to show rising median prices for
existing single-family homes.
11 areas actually showed double-digit annual gains and another
12 had increases of 6 percent or more. 77 Areas had price declines and 16 of
those lost values in the double digits.
Still, in spite of the fact that the market is holding up well in much of the
country, median prices for the country as a whole and for each of the four regions
were down from the fourth quarter of 2006. The median price for the country
declined 5.8 percent from $219,000 to $206,200. The West, which also had the
highest prices in the country, took the biggest hit. The median price in that
region in the fourth quarter of 2006 was $355,000 but had declined 8.7 percent
to $324,100 in the latest report. The Midwest, which has the lowest median price
fared the best, losing only 3.2 percent to a fourth quarter price of $156,300.
The largest single-family price increase was in the Cumberland
area of Maryland and West Virginia. Prices there rose 19.0 percent from a year
ago to a median of $116,500. Other big winners were Yakima, Washington (18.0
percent to a median of $170,600) and Binghamton, New York where prices increased
14.8 percent to a median of $110,000.
Big losers were Lansing/East Lansing Michigan where median
prices dropped 18.8 percent to $109,600; the Sacramento California MSA which
lost 18.5 percent in value to $297,600; and Jackson Mississippi and Riverside/San
Bernardino California each at -16.8 percent to median prices of $120,900 and
Lawrence Yun, NAR chief economist, said disruptions in the mortgage
market have played a role. "The continuing crunch in the jumbo loan
market that began in August has disproportionately reduced the number of transactions
in higher price ranges. For buyers who need loans of more than $417,000, mortgage
interest rates have been running more than a percentage point higher, and that
has been having an obvious impact. Higher ratios of sales for more moderately
priced homes are naturally dampening the national median price as well as the
data for some of the more expensive markets."
NAR President Richard Gaylord said he is encouraged by the raising of Freddie
Mac, Fannie Mae, and FHA conventional loan
limits. "Higher limits for FHA loans, which go into effect
March 14, will be a big help to first-time buyers in high-cost markets. Higher
limits for conventional loans purchased by Freddie Mac and Fannie Mae will take
a bit longer - when they become available, high-income, creditworthy borrowers
in high-cost areas will have access to affordable and safer financing, and that
will help unleash pent-up demand."
The NAR report also covered condominium and cooperative prices in 59 metropolitan
areas. The national median price for existing condos was $221,100 in the fourth
quarter, only $100 less than in the fourth quarter of 2006. Thirty-three areas
showed year-over-year increases (four of these had double-digit gains) while
26 areas saw prices decline, four of those by double-digits.
Total state existing-home sales, including single-family and condo, were at
a seasonally adjusted annual rate(2) of 4.96 million units in the fourth quarter,
down 8.5 percent from 5.42 million in the third quarter, and are 20.9 percent
below a 6.26 million-unit pace in the fourth quarter of 2006.
NAR began tracking of metropolitan area median single-family home prices in
1979; the metro area condo price series was launched at the beginning of 2006,
with several years of historic data.