NAR: Existing Home Prices Stable Third Quarter 2010

Home prices over the past year have remained relatively unchanged over the past year, even though the pace of sales has sharply declined since the ending of the home buyer’s tax credit, the National Association of Realtors (NAR) reported on Thursday.

The national median existing single-family home price of $177,900 in the third quarter was just 0.2% lower than the median price of $178,200 in the same quarter of 2009.

But while the national median home price has remained fairly stable over the past year, home prices have been moving sharply in both directions in individual metropolitan areas across the country, being about equally split for price decreases and price increases.

In the third quarter, 77 out of the 155 metropolitan areas tracked by the NAR showed an increase in the price of single-family homes, compared to the third quarter of 2009.

Eleven of those metros had large price increases in the double digits, most notably the Burlington, VT area - which led with a 17.4% price increase over the year. Elmira, NY came in a close second with a 16.9% increase, followed by Dallas/Ft. Worth, TX with a 14.2% increase in home prices from the third quarter 2009.

There were 76 metropolitan areas that saw a drop in the median home price, 16 of which had double digit decreases. Ocala, FL had the largest decrease of 20% in the third quarter from the year before, dropping to a median home price of $82,200. The median home price just three years earlier, in 2007, was twice that at $164,600. Two metro areas recorded no change in home price: Des Moines, IA and Virginia Beach-Norfolk-Newport News, VA-NC.

Lawrence Yun, NAR chief economist, said, “Even with swings in home sales, prices this year have been changing very little from year-ago readings. Areas with some larger swings in home price reflect the degree of distressed sales in those markets,” he said.

“Home sales through the first three quarters of this year are virtually the same as year-to-date sales at this time last year, and therefore broadly support home values. However, there are large local market differences with prices rising in job-creating regions like the Washington, D.C. area, the Dakotas and Texas; and also in markets recovering from over-correction such as California coastal cities,” Yun said.
By region, the Northwest was the only area that had a gain in the median home price, up by 2.5% over the year to $253,400. The median home price dropped by 3% in the Midwest to $145,600; by 1.9% in the South to $157,000; and by 0.4% in the West to $224,800.

Ron Phipps, NAR President and broker-president of Phipps Realty in Warwick, RI said that housing is more affordable than it has been in decades. “Given the relationship between mortgage interest rates, home prices and median family income, the buying power in today’s market is matching the highest levels we’ve seen dating all the way back to 1970,” Phipps said.

Yun said that there are other factors also contributing to the stability of housing prices - including a recent surge in commodity prices, and that in many areas, prices for homes on the market are lower than what it would cost to build a similar new home.

For those who plan to buy a home and stay there for the long term, there are plenty of great opportunities out there.


Source:
National Association of Realtors