Half of 155 Large Metro Areas Posted Home Price Increases

Despite the continued price reduction impact of distressed homes nationwide, the prices of pre-owned single-family homes in 77 of 155 major metropolitan areas surveyed by the National Association of Realtors increased in the third quarter this year.

Compared to the third quarter last year, these 77 metro markets posted increases in the median prices of existing single-family homes, with 11 markets posting substantial gains. During the same quarter last year, only 30 metro markets showed year-over-year price gains.

The markets which showed significant home price increases in the July to September quarter were places where job creation accelerated, such as the Washington, D.C. region, Texas, and North and South Dakota. Coastal cities in California, which have started recovering from market overcorrection, also showed substantial price recoveries.  

Similarly, housing markets in the Northeast showed increases in the median prices of pre-owned single-family houses in the third quarter. The median price surged by 2.5 percent over the year to $253,400.

In contrast, median prices in other regions declined in the existing single-family market. The price median in the Midwest dropped by 3 percent to $145,600 while the price median in the South dropped by 1.9 percent to $157,000. The drop in the West was smaller, as the median price decreased by less than half percent to $224,800.     

Nationwide, the median price for pre-owned single-family houses was $177,900, almost unchanged from the $178,200 median in the third quarter last year.  

The metro areas with the highest year-over-year rate of increases were:

  1. Burlington-South Burlington, Vermont     17.6 percent
  2. Elmira, New York     16.9 percent
  3. Dallas-Fort Worth-Arlington, Texas     14.2 percent
  4. Fargo, North Dakota     13.6 percent
  5. Bridgeport-Stamford-Norwalk, Connecticut     13.3 percent
  6. Erie, Pennsylvania     13.2 percent
  7. Riverside-San Bernardino-Ontario, California     13.1 percent  

As unemployment and business slowdown continued to affect a huge number of Americans, pre-owned single-family home and condo sales also declined. Additionally, the end of the first time home buyer tax credit widened the gap between second- and third-quarter sales. Using seasonally adjusted annual calculations, annual sales fell sharply from 5.57 million in the second quarter to 4.16 million in the third quarter, a drop of 25.3 percent. Compared to the adjusted total of 5.28 million in sales in the third quarter last year, third quarter home sales this year fell by 21.2 percent.

According to most housing market analysts, despite discouraging developments, there’s one positive thing arising from the negatives, and that’s housing affordability. With among the lowest mortgage rates in history, among the lowest home price levels in recent times and among the highest levels of home inventory, American families who could not even consider just looking at homes for sale before can now buy a home they can call their own.