More Areas Seeing Double Digit Home Price Gains

Home price appreciation accelerated inrnmany metropolitan areas in the first quarter of 2015.  The National Association of Realtors® (NAR) againrnsaid the cause for rising prices was a lagging inventory of available houses inrnthe face of a growing demand. </p

Median home prices increased in thernfirst quarter in 85 percent of the 174 metropolitan statistical areas (MSAs)rntracked by NAR, the same percentage as posted increases in the fourth quarter ofrn2014.  However in 51 of those areas (29 percent)rnthe gains were in double digits, more than double the number (24) showing suchrngrowth a quarter earlier and significantly higher than the 37 MSAs in thatrncategory in the first quarter of 2014. Twenty-five areas (14 percent) saw medianrnprices decline year over year. </p

Lawrence Yun, NAR chief economist, saysrnafter moderating to healthier levels of growth at the end of 2014, pricesrnpicked up in several metro areas during the first quarter. “Sales activityrnto start the year was notably higher than a year ago, as steady hiring and lowrninterest rates encouraged more buyers to enter the market,” he said.rn”However, stronger demand without increasing supply led to faster pricerngrowth in many markets.”</p

Adds Yun, “Sales could soften</bslightly in some of these markets seeing sharp price appreciation unlessrnhousing supply markedly improves and tempers its unhealthy level ofrngrowth."</p

The highest prices were found among the<busual suspects; San Jose where the median existing single-family price wasrn$900,000; San Francisco, $748,300; Honolulu, $699,300; Anaheim-Santa Ana,rnCalif., $685,700; and San Diego, $510,300.</p

The lowest-cost metro areas in thernfirst quarter were those around Youngstown, Ohio, $64,300; Cumberland, Maryland,rn$71,600; Rockfordand Decatur, Illinois, $78,600 and $82,200 respectively; andrnToledo, $83,800.</p

Despite higher prices affordability improvedrnslightly compared to Q1 2014.  NAR said thisrnwas enabled by lower interest rates and an uptick in the national family medianrnincome to $66,257. To purchase a single-family home at the national medianrnprice, a buyer making a 5 percent downpayment would need an income of $43,466,rna 10 percent downpayment would require an income of $41,178, and $36,603 wouldrnbe needed for a 20 percent downpayment.</p

Sales in the Northeast were down 11.2rnpercent quarter-over-quarter but were still 2.2 percent higher than a yearrnearlier.  The median existingrnsingle-family home price in the region was $245,000 in the first quarter, uprn2.4 percent from a year ago.</p

In the Midwest, existing-home salesrndeclined 2.0 percent in the first quarter and 6.3 percent higher than a yearrnago. The median existing single-family home price increased year-over-year by 8.9rnpercent to $156,600. </p

Existing-home sales in the South wererndown one-half percentage point for the quarter but rose 7.8 percent from a yearrnearlier. The median existing single-family home price was $182,300, up 8.2rnpercent on an annual basis.  </p

In the West, existing-home salesrnincreased 1.5 percent in the first quarter and are 5.4 percent above a yearrnago. The region’s median existing single-family home price increased 5.8rnpercent to $295,500. </p

Another measure of home prices FNC’s Residential Price Indexrn(RPI) released on Monday indicates that national residential property values (thernComposite 100 index) increased 0.9 percent from February to March and 4.6% compared to March 2014.  FNC’s 10-City index was up 0.6 in Marchrnand the 20- and 30 MSAs increased by about 0.9 percent.  None of the indices are seasonally adjustedrnand they do not includes distressed sales.

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