WASHINGTON -- May 13, 2005 -- A growing number of metropolitan areas showed double-digit annual increases in median existing-home prices in the first quarter, with an upward trend in overall price appreciation, according to the latest survey by the National Association of Realtors� (NAR), with three Florida metro areas -- Bradenton, Sarasota and West Palm Beach-Boca Raton -- registering the highest percentage increases in the nation.
NAR's first-quarter metro area home price report, covering changes in 136 metropolitan statistical areas, shows a record of 66 areas with double-digit annual increases in median existing single-family home prices and only six areas posting modest price declines. The previous record was 62 metros showing double-digit price appreciation in the fourth quarter of 2004.
The national median existing single-family home price was $188,800 in the first quarter, up 9.7 percent from the first quarter of 2004 when the median price was $172,100. The median is a typical market price where half of the homes sold for more and half sold for less. In the fourth quarter of 2004, the national annual rate of home-price appreciation was 8.8 percent.
David Lereah, NAR's chief economist, points to the tight supply of homes available for sale. "We simply don't have enough homes on the market to meet demand," he says. "Low mortgage interest rates are drawing new households into the market, but some are disappointed by their inability to find a home that meets their needs. We think the supply situation may improve next year when interest rates are expected to be higher -- that should result in a lessening of demand and cooler price appreciation."
According to NAR's statistics, the strongest price increase was in Bradenton, where the first-quarter price of $275,100 rose 45.6 percent from a year earlier. Next was Sarasota, at $326,300, up 36.0 percent from the first quarter of 2004. Third was the West Palm Beach-Boca Raton-Delray Beach area, with a first-quarter median price of $362,800, up 35.9 percent in the last year.
In the South, the typical existing single-family home price rose 6.6 percent to a median of $166,600 in the first quarter from a year earlier. After the Bradenton, Fla., area, Sarasota, Fla., and the West Palm Beach-Boca Raton-Delray Beach area, the strongest increase in the South was in the Orlando area, at $194,400, up 28.7 percent from the first quarter of 2004. Next was Miami-Hialeah, at $315,700, up 28.4 percent, and Ocala, Fla., where the first-quarter median price of $122,200 was 27.0 percent higher than a year ago.
Eighteen other Southern metro areas experienced double-digit increases in their median price, including the Ft. Myers-Cape Coral-Punta Gorda area of Florida; the Washington, D.C., area; Norfolk-Virginia Beach-Newport News, Va.; Richmond-Petersburg, Va.; and Tampa-St. Petersburg-Clearwater.
NAR President Al Mansell says buyers need to do their homework. "If homebuyers find themselves in a market where price-bidding is common, they need to have a handle on comparable market values and avoid the temptation to take shortcuts," he says. "It's especially important to understand loan terms -- a real estate professional can help you to avoid riskier products, in addition to walking you through the transaction process."
In the small number of areas with price declines, none had previously experienced rapid price growth. Generally, these are lower-cost markets experiencing one or both of the conditions necessary for price softness -- local economic weakness, mainly in jobs, or a large supply of homes available in the local market; typically, these are temporary in nature.
Median first-quarter metro area resale prices ranged from $82,400 in Youngstown-Warren, Ohio, to more than eight times that amount in the San Francisco Bay area where the median price was $689,200. The second most expensive area in the United States was Anaheim-Santa Ana (Orange Co., Calif.) at $656,900, followed by San Diego at $584,100.
Other low-cost markets include Waterloo-Cedar Falls, Iowa, the second least-costly area, at $86,500, and Beaumont-Port Arthur, Texas, with a first-quarter typical resale home price of $90,000.
Regionally, the strongest increase was in the West where the median existing single-family home price was $282,900 during the first quarter, up 16.9 percent from a year ago. The strongest increase in the region was in Riverside-San Bernardino, Calif., where the median price of $343,400 rose 36.2 percent from a year earlier, followed by the Las Vegas area, at $291,000, up 29.4 percent, and Sacramento, at $352,900, up 26.9 percent from the first quarter of 2004. Fourteen other Western metro areas also experienced double-digit annual price gains including Honolulu, Phoenix, Los Angeles, San Diego, San Francisco, Anaheim-Santa Ana and Seattle.
In the Northeast, the median resale price during the first quarter was $245,700, rising 14.0 percent from a year earlier. The strongest increase in the region was in the Atlantic City, N.J., area, at $217,400, up 23.2 percent from the first quarter of 2004, followed by Monmouth-Ocean, N.J., with a median price of $358,500, up 20.3 percent, and the Middlesex-Somerset-Hunterdon area of New Jersey, at $381,400, up 18.2 percent.
Twelve other Northeastern metros had double-digit price gains including, Bergen-Passaic, N.J.; the New York City area; the Albany-Schenectady-Troy area of New York; Nassau-Suffolk, N.Y.; Hartford, Conn.; and Boston.
In the Midwest, the first-quarter median existing-home price of $148,800 increased 7.8 percent from the same period in 2004. The strongest increase in the Midwest was in Springfield, Mo., where the median price of $126,400 was 15.4 percent higher than the first quarter of 2004. Next came Rockford, Ill., at $129,300 in the first quarter, up 14.0 percent, and the Champaign-Urbana-Rantoul area of Illinois, at $120,700, up 12.9 percent in the last year. Wichita, Kansas; Aurora-Elgin, Ill.; South Bend-Mishawaka, Ind.; Springfield, Ill.; and Green Bay, Wis., also had double-digit gains.
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