Not Surprising…
Feb 16th, 2006 by Jason
Region’s median home price jumped 31.5 percent last year
By FROM STAFF AND WIRE REPORTS, The Virginian-Pilot
© February 16, 2006
For anyone looking to buy a house in Hampton Roads, price has probably seemed like a moving target – an upwardly mobile one.
And statistics from the National Association of Realtors confirm that notion.
Hampton Roads ranked among the top 10 areas in the nation in 2005 in terms of median price increases for existing single-family homes, according to an association report released Wednesday.
More… The region, known as Virginia Beach/Norfolk/Newport News, ranked seventh, with an increase of 31.5 percent over last fiscal year and a median price of $220,500.
Overall, median prices increased 13.6 percent across the nation in 2005, according to the report, which surveyed 145 markets.
The median is the point at which half the homes sold for more and half for less.
Despite a slowdown in the market during the last few months of last year, one local real estate expert thinks housing prices will continue to rise in 2006.
“The real estate industry is tired of the headlines saying the bubble is bursting and saying this is going to be a doom-and-gloom market,” said Cyndi S. Osborough, vice president of operations for Rose & Womble, a realty company.
Osborough said the rise in prices in Hampton Roads is a result of supply not meeting demand.
“The amount of buyers and the amount of supply has been out of whack for the last few years,” she said. “This is why we have seen 10 contracts on a house within a few hours. Has there been some pushback from consumers on price? Sure. But I see that as a healthy thing.”
Nationally, the Realtors group said a record 72 metropolitan areas had double-digit gains in sales prices for existing homes in the final three months of 2005 when compared with the same period a year earlier.
The previous record, in the fall of 2004, was 69 cities with double-digit price increases for existing homes.
“Although home sales have eased, the tremendous momentum in price appreciation was sustained in the fourth quarter because tight inventories still favored sellers,” said David Lereah, chief economist for the Realtors.
The Realtors group found that home sales fell 4.7 percent nationally in the fourth quarter from a record in the previous three months. Sales of existing single-family homes and condominiums declined to an annualized pace of 6.9 million, seasonally adjusted, from 7.24 million in the third quarter, the trade group said.
The housing market is slowing from a “red hot” pace as rising mortgage rates make homes less affordable, said Richard Yamarone, chief economist at Argus Research Corp. in New York. Home sales probably will settle to the third-best year on record after posting all-time highs every year since 1999, he said.
Lereah said that with sales slowing, the supply of homes on the market has risen, which will help keep a lid on price increases in the coming year. “We are entering a period of a more normal balance in supply and demand,” he said.
For the final three months of 2005, the median sales price for an existing home nationally was $213,000, compared with $187,500 in the fourth quarter of 2004. The biggest jump in prices in the fourth quarter was in the Phoenix/Mesa/Scottsdale area of Arizona, where existing home prices soared by 48.9 percent, to $268,400.
Next was the Cape Coral/Fort Myers area of Florida, where existing home prices jumped by 48 percent in the fourth quarter of last year, to a median of $293,100.
Orlando, Fla., was in third place, with a price increase of 42 percent, to $261,800.
The highest sales price in the fourth quarter was the San Jose/Sunnyvale/Santa Clara area of California, where the median price was $747,000. The second-most-expensive area in the country was the San Francisco/Oakland/Fremont area at $718,700, followed by the Anaheim/Santa Ana/Irvine area (Orange County, Calif.), at $699,800.
At the other end of the scale, the lowest median price in the Realtors survey was in the Danville, Ill., area, where the median sales price was $63,800. Other low-cost markets included Elmira, N.Y., the second-least-costly metro area, at $78,800, and Decatur, Ill., with a fourth-quarter typical resale home price of $84,500.
As for condo prices, the strongest gains were in the Phoenix/Mesa/Scottsdale area, where the fourth-quarter price of $175,600 jumped 50.9 percent from a year ago. In the Tampa/St. Petersburg/Clearwater area of Florida, the median condo price of $185,400 rose 37.1 percent from the fourth quarter of 2004, while the Honolulu area, at $300,000, increased 36.4 percent.
In all, 52.9 percent of the available markets experienced double-digit annual condo price appreciation.
This article was compiled from reports from The Associated Press and Bloomberg News. Staff writer Battinto Batts also contributed.