The median price of U.S. single-family resale homes dropped 5.8 percent in the fourth quarter compared to the same quarter in 2006, the National Association of Realtors reported today, with prices falling in 77 of 150 metro areas tracked.
Sales of resale homes, including single-family homes and condos, fell 20.9 percent in the fourth quarter compared to the same quarter in the previous year. Fourth-quarter sales dropped in every state compared to the previous year’s fourth quarter except in South Dakota, which saw sales rise 8.9 percent compared to 2006, NAR reported.
Median single-family prices dropped most in the Lansing, Mich., metro area, falling 18.8 percent year-over-year in the fourth quarter. Next on the list was the Sacramento, Calif., metro area, down 18.5 percent; Riverside, Calif., down 16.8 percent; Jackson, Miss., down 16.8 percent; Decatur, Ill., down 15.9 percent; Detroit, Mich., down 13.8 percent; Los Angeles, Calif., down 13.1 percent; Palm Bay and Cape Coral, Fla., down 13 percent, and Las Vegas, Nev., down 12.8 percent.
The median price of single-family resale homes appreciated most in the Cumberland, Md.-W.V., metro area in the fourth quarter compared to the same quarter in the prior year, rising 19 percent. Prices rose 18 percent in Yakima, Wash.; 14.8 percent in Binghamton, N.Y.; 14.4 percent in Springfield, Ill.; 14 percent in Kennewick, Wash.; 13.5 percent in Bismarck, N.D.; 12.1 percent in Waterloo, Iowa; 11.2 percent in San Jose, Calif.; 11.1 percent in Topeka, Kan.; and 11 percent in Amarillo, Texas.
Eleven metro areas had double-digit annual price gains while 16 had double-digit price drops.
The Youngstown-Warren-Boardman, Ohio-Pa., metro area ranked as the most affordable metro area in the nation, with a median single-family resale home price of $72,600 in the fourth quarter. Saginaw, Mich., ranked second with a $74,900 median price in the fourth quarter, followed by Decatur, Ill., at $75,000.
Three of the most affordable metro areas in the fourth quarter are in Ohio; two are in New York; two are in Indiana; and two are in Illinois.
At the other side of the cost spectrum, San Jose, Calif., ranked as the most expensive metro area, with a median single-family resale home price of $845,300 in the fourth quarter. The San Francisco metro area ranked second at $777,300, followed by Anaheim, Calif., at $657,400.
California is home to five of the highest-priced metro areas in the report, while three are in New York.
Regionally, the median single-family resale home price dropped 8.7 percent in the West, 5.4 percent in the South, 4.8 percent in the Northeast and 3.2 percent in the Midwest in the fourth quarter compared to fourth-quarter 2006.
Nevada suffered the largest year-over-year drop in sales of resale homes in fourth-quarter 2007, at 44.2 percent. Sales fell 42.4 percent in Wyoming; 38.7 percent in New Mexico; 38.4 percent in Oregon; 37.5 percent in Arizona; 33.8 percent in Utah; 33.5 percent in Maryland; 29.8 percent in California; 29 percent in Florida; and 23.8 percent in Georgia.
The states with the slightest year-over-year decline in sales in the fourth-quarter include: Michigan, down 2.7 percent; Colorado, down 2.8 percent; Washington, D.C., down 4.8 percent; Arkansas, down 5.5 percent; Oklahoma, down 6.2 percent; West Virginia, down 6.8 percent; Alaska, down 7.4 percent; Mississippi, down 8.2 percent; and New York, down 8.7 percent.
“The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,” said Lawrence Yun, NAR chief economist, in a statement. “For buyers who need loans of more than $417,000, mortgage interest rates have been running more than a percentage point higher, and that has been having an obvious impact.”
Richard Gaylord, 2008 NAR president, said in a statement that plans to hike conventional loan limits are encouraging. “Higher limits for (Federal Housing Administration) loans, which go into effect March 14, will be a big help to first-time buyers in high-cost markets. Higher limits for conventional loans purchased by Freddie Mac and Fannie Mae will take a bit longer — when they become available, high-income, creditworthy borrowers in high-cost areas will have access to affordable and safer financing, and that will help unleash pent-up demand.”
Metro home price and state resale data for the first quarter are scheduled for release on May 13.