Flooring News and Information

Washington, DC, Aug. 13�Price increases in many metropolitan areas gained strength during the second quarter, according to the latest survey by National Association of Realtors. The association's second quarter metro area home price report, covering changes in 125 metropolitan statistical areas, shows 34 areas with double digit annual increases in median existing home prices and only five areas posting declines.

Dr. David Lereah, NAR's chief economist, said most metros experienced increases above historic norms. "There were 79 areas with price increases greater than 4.5%� that means home prices in most of the country are rising more that two percentage points above the general rate of inflation, which was 2.5% during the second quarter," he said. "Historically, median home prices rise one to two percentage points above the overall rate of inflation, so these increases offer some very healthy gains for home sellers," he explained.

The national median existing home price was $146,900 during the second quarter, up 6.4% from the second quarter last year when the median price was $138,000.

NAR president Richard A. Mendenhall attributed the increases to exceptionally strong home sales. "Clearly, the demand from near record home sales is a major factor in higher home prices, but in most areas prices are not running away from people's ability or desire to buy," he said. "Going forward, our biggest concern is affordability for first time buyers, who are key to the continued health of the housing market and its contribution to the overall economy."

The strongest increase was in Sacramento, with a median price of $176,000, up 23.9% from the second quarter last year. Next came Washington, D.C., where the second quarter median price of $206,700 rose 18.6% from a year earlier. Third was the Bergen-Passaic area of New Jersey at $276,800, up 17% from the second quarter last year.

Median second quarter metro resale prices ranged from $82,500 in Beaumont-Port Arthur, Texas, to nearly six times that amount in the San Francisco Bay area, where the median price was $483,600. The second most expensive area was Boston at $356,200, followed Anaheim-Santa Ana, with a second quarter median resale price of $352,700.

Other low cost markets include Syracuse, New York, the second least costly area at $85,100, and Saginaw-Bay City-Midland, Michigan, with a second quarter typical resale home price of $85,400.

Regionally, the strongest increase was in the South where the median existing home price of $139,400 rose 10.2% from the second quarter of 2000. After Washington, the strongest increase in the region was in Charleston, West Virginia, where the median price of $110,100 was 15.9% higher than a year earlier. In Jacksonville, Florida, the second quarter median price of $111,900 was up 13.7% in the last year, while Mobile, Alabama, at $113,100, rose 13.4% from a year earlier. Seven other metro areas in the South experienced double digit price increases.

The second quarter median existing home price in the West was $193,900, up 5.4% from a year ago. After Sacramento, the highest increase in the region was in Riverside-San Bernardino, California, with a median price of $157,500, up 15.4% from the second quarter last year. Denver, with a second quarter median price of $219,000, rose 11.9% from a year earlier. Las Vegas, at $147,300, was up 8.5% from the second quarter of 2000.

In the Midwest, the median resale home price of $126,000 during the second quarter was 3.4% higher than the same period last year. The strongest increase in the region was in Lansing, Michigan, with a median price of $124,700, up 16.7% in the last year. The next highest increase was in Sioux Falls, South Dakota, where the median price of $116,800 was 13.6% higher than the same period last year, followed by South Bend-Mishawaka, Indiana, at $97,700, up 12.7% in the last year. Seven other Midwestern metro areas experienced double digit price increases.

The median resale price in the Northeast during the second quarter was $146,000, rising 1.4% from a year earlier. After Bergen-Passaic, New Jersey, the strongest increase in the region was in Worcester, Massachusetts, where the typical resale price was $147,900, up 13.8% from a year ago, followed by Middlesex-Somerset-Hunterdon, New Jersey, with a median price of $238,900, which was 12.3% higher than the second quarter of 2000. Next came Providence, with a second quarter median price of $153,900, up 12.2% in the last year. Five other metros in the Northeast also show double digit median price gains.