Home prices continued to increase as broadly if not as rapidly as in previous periods the National Association of Realtors® (NAR) reported today. Median prices increased in the first quarter of 2014 in 125 or 74 percent of the 170 metropolitan areas NAR tracks. In the first quarter of 2013 89 percent of markets reported year-over-year gains.
The national median existing single-family home price was $191,600 in the first quarter, up 8.6 percent from $176,400 in the first quarter of 2013. In the fourth quarter the median price rose 10.1 percent from a year earlier. Distressed homes – foreclosures and short sales generally sold at discount – accounted for 15 percent of first quarter sales, down from 23 percent a year ago. In the condo sector, metro area condominium and cooperative prices – covering changes in 59 metro areas – showed the national median existing-condo price was $191,400 in the first quarter, up 10.8 percent from the first quarter of 2013. Fifty metros showed increases in their median condo price from a year ago, and nine areas had declines.
Lawrence Yun, NAR chief economist, said the price trend is favorable. “The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we still need more new-home construction to fully alleviate the inventory shortages in much of the country,” he said. “Limited inventory is creating unsustainable and unhealthy price growth in some large markets, notably on the West Coast.”
There were double digit price increases in 37 metro areas and seven had increases in excess of 20 percent on an annual basis: South Bend-Mishawaka, Indiana (26.8 percent); Naples-Marco Island, Florida (26.6 percent); Las Vegas (23.5 percent); Lansing, Michigan (23.4 percent); Atlanta-Marietta (23.3 percent); Riverside-San Bernardino (23.1 percent); Sacramento (22.2 percent).
Forty-five metro areas had annual decreases, some of them substantial. Among the largest were Cumberland, Maryland (-18.6 percent); Springfield, Illinois (-15.1 percent); Florence, South Carolina (-12.3 percent); and Oshkosh, Wisconsin (-11.0 percent).
The five most expensive housing markets in the first quarter were the San Jose metro area, where the median existing single-family price was $808,000; San Francisco, $679,800; Honolulu, $672,300; Anaheim-Santa Ana, $669,800; and San Diego, where the median price was $483,000.
The five lowest-cost metro areas were Youngstown-Warren-Boardman, Ohio, with a median single-family home price of $64,600 in the first quarter; Decatur, Illinois, $69,600; Toledo, Ohio, $72,100; Rockford, Illinois, $73,100; and Cumberland at $81,400.
Inventory increased slightly from a year earlier. There were 1.99 million existing homes for sale at the end of the first quarter compared to 1.93 million in the first quarter of 2013. The current inventory is the equivalent of a 5.0 month supply compared to 4.6 months a year earlier. A supply of 6 to 7 months represents a rough balance between buyers and sellers.
Total existing-home sales, including single-family and condo, fell 6.9 percent to a seasonally adjusted annual rate of 4.60 million in the first quarter from 4.94 million in the fourth quarter, and were 6.6 percent below the 4.93 million level during the first quarter of 2013.
NAR President Steve Brown said there’s been some erosion in housing affordability. “Both home prices and mortgage interest rates are higher than a year ago, but the good news is that median income is enough to purchase a home in most areas. There are good potential buying opportunities in areas where there has been consistent local job creation, and where prices have not risen significantly, or where they may be experiencing temporary declines,” he said.
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 sell but a more difficult time to buy”