NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the U.S. market is very dynamic. "It's more important than ever to examine what's happening with home prices at the city and neighborhood level," Gaylord said. "The old real estate mantra of 'location, location, location' is perhaps more relevant today than ever before. Consumers should check with Realtors(R) for local expertise on what's going on in their own area because conditions can vary considerably from one neighborhood to the next."
A proportionately larger slowdown in home sales from a year ago in high-cost markets is continuing to drag down the aggregate national median price. In the first quarter, the median existing single-family home price was $196,300, down 7.7 percent from the first quarter of 2007 when the median price was $212,600. The national median normally is a typical market price, where half of the homes sold for more and half sold for less.
Lawrence Yun, NAR chief economist, said the numbers don't tell the whole story. "These are highly unusual results because there were very few jumbo loan originations in the latest quarter, so sales are much slower in high-cost areas, and at the same time foreclosures related to subprime mortgages rose," he said. "Neighborhoods with little subprime exposure are holding on very well, while prices have fallen in neighborhoods with a wide prevalence of subprime loans because more foreclosed properties are being sold at discounted prices."
Yun pointed out that homeowners with subprime loans account for less than 10 percent of all homeowners. "Even so, subprime mortgages account for more than half of all foreclosures. Sharp price declines are principally in neighborhoods where subprime lending has been widely prevalent," he said.
The typical seller in the first quarter, who purchased their home six years ago, saw a sizable equity gain despite a price drop from a year ago. The median increase in value for sellers who purchased that home in the first quarter of 2002 is 23.8 percent, and the median home equity accumulation is $37,700.
"The typical home buyer today plans to own that property for 10 years, and with that kind of long-term view most people will do quite well," Gaylord said. "Inventories have stabilized and mortgage availability is beginning to improve, so we expect overall prices to go positive during the second half of the year."
In the first quarter, the largest single-family home price increase was the Binghamton, N.Y., area, where the median price of $109,700 rose 11.8 percent from a year ago. Next was Peoria, Ill., at $119,000, up 10.4 percent from the first quarter of 2007, followed by the Spartanburg, S.C., area, where the first-quarter median price increased 10.1 percent to $130,300.
Median first-quarter metro area single-family home prices ranged from a very affordable $65,400 in the Saginaw-Saginaw Township North area of Michigan, to nearly 12 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $780,000. The second most expensive area was San Francisco-Oakland-Fremont, at $701,700, followed by Honolulu at $620,000.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $67,700, and Decatur, Ill., with a first-quarter median price of $79,400.
In the condo sector, metro area condominium and cooperative prices - covering changes in 55 metro areas - showed the national median existing-condo price was $216,900 in the first quarter, down 3.0 percent from $223,700 in the first quarter of 2007. Twenty-three metros showed annual increases in the median condo price, 31 areas had price declines and one was unchanged.
The strongest condo price increases were in Bismarck, N.D., where the first quarter price of $124,900 rose 36.4 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $170,500, up 15.3 percent, and Wichita, Kan., where the median condo price of $106,600 rose 11.7 percent from the first quarter of 2007.
Metro area median existing-condo prices in the first quarter ranged from $106,600 in Wichita to $546,700 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was Los Angeles-Long Beach-Santa Ana, at $343,700, followed by the New York-Wayne-White Plains, area of New York and New Jersey at $333,800.
Other affordable condo markets include the Indianapolis area at $110,000 in the first quarter, and Syracuse, N.Y., at $111,100.
Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 4.95 million units in the first quarter, down 0.9 percent from an upwardly revised 5.00 million in the fourth quarter, and are 22.2 percent below a 6.36 million-unit pace in the first quarter of 2007.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to 5.88 percent in the first quarter from 6.23 percent in the fourth quarter; the rate was 6.22 percent in the first quarter of 2007.
Regionally, the median existing single-family home price in the Northeast rose 3.2 percent to $280,000 in the first quarter from the same period in 2007. After Binghamton, the strongest price increase in the Northeast was in Elmira, N.Y., at $82,500, up 9.6 percent from the first quarter of 2007, followed by Glens Falls, N.Y., with a median price of $163,100, up 7.7 percent.
In the South, the median existing single-family home price was $164,200 in the first quarter, down 7.5 percent from a year earlier. After Spartanburg, the strongest price increases in the South were three areas in Texas: El Paso, at $134,600, up 8.5 percent from a year ago, followed by the Amarillo area with an 8.2 percent gain to $122,200, and Beaumont-Port Arthur, at $122,900, up 6.1 percent.
The median existing single-family home price in the Midwest declined 7.9 percent to $142,700 in the first quarter from the same period in 2007. After Peoria, the strongest metro price increases in the Midwest were in the Decatur area, where the median price of $79,400 was 4.2 percent higher than a year ago, and Springfield, Ill., at $172,200, also up 4.2 percent. Next was the Wichita, Kansas, area, at $112,700, up 4.0 percent from the first quarter of 2007.
In the West, the median existing single-family home price was $296,300 in the first quarter, which is 12.3 percent below a year ago. "This is the area hardest hit by the slowdown in jumbo mortgage loan origination, which is just now starting to improve," Yun noted.
The strongest metro price increase in the West was in the Yakima, Wash., area, at $148,400, up 9.0 percent from a year ago, followed by Farmington, N.M., at $190,000, up 6.3 percent, and the Salt Lake City area, at $225,700, up 3.5 percent from the first quarter of 2007.
