Home prices rose in more than half of U.S. metropolitan areas in the first quarter of 2012 as the residential market continued to show signs of stabilizing after nearly six years of price declines.
The median price for an existing, or previously owned, home rose in 74 of the 146 markets tracked by the National Association of Realtors during the January-to-March period. The trade group, which issued its report Wednesday, said the latest trend represented a significant change from the fourth quarter, when home price rose in just 29 metropolitan areas.
The NAR said the last time prices increased in more markets than decreased was in the fourth quarter of 2010, after a federal tax-credit program for home buyers expired. The credit had temporarily lifted prices and sales, but prices began falling again in early 2011. But excluding the tax-credit period, which some economists argue was an artificial boost, prices haven’t risen in so many metro areas since the third quarter of 2007.
Still, the overall national median price for single-family homes sold in the first quarter continued to drift lower and was $158,100, down 0.4% from a year earlier.
The news comes during what many real-estate agents say is shaping up to be the strongest spring selling season in several years as home buyers conclude that prices are at or near a bottom. That has pulled bargain hunters to get off the fence and into the market.
“Houses are starting to sell more quickly than we’ve seen in the last two or three years,” said Nathan Walldorf, an agent with Herman Walldorf & Co. Realtors Inc., in Chattanooga. “I wouldn’t call it a seller’s market yet, but it could be that we’re headed in that direction.” According to the NAR report, average prices in Chattanooga were up 1.6%.
The biggest year-over-year price gain of 28.1% was seen in Cape Coral-Fort Myers, Fla., a market severely overbuilt during the boom. Other cities that saw price improvements: Grand Rapids, Mich. was up 19%, Tampa climbed 16.1%, while the Sarasota gained 11.1%. Areas showing the biggest price declines were Kingston, N.Y. , down 22%; Bridgeport-Stamford-Norwalk, Conn., down 18% and Mobile, Ala., down 14.7%. Hard-hit Las Vegas declined 4.8%.
To be sure, median prices can be a misleading measurement because they are affected by the mix of homes available. For example, if investors snap up the bulk of homes selling for $100,000 or less and there are few low-priced homes on the market, that can increase the median price due to a change in the mix of what’s selling.
Still, the Realtors are confident the market is healing. In the first quarter, sales of existing homes, which include condos, climbed 5.3% from the prior year to a seasonally adjusted 4.57 million.
Increasing demand has left fewer homes available. At the end of the first quarter, there were 2.37 million homes for sale, down 22% from a year ago, and well below the record 4.04 million seen about five years ago.
Agents say there aren’t enough homes to meet demand in some markets including Orange County, Calif., and Phoenix.
“We now have broad shortages of lower priced homes in much of the country,” said Lawrence Yun, the NAR’s chief economist.
– Alan Zibel and Dawn Wotapka
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to buy and not a bad time to sell”