FHFA Survey Shows Prices End '09 on Upswing
The average price of a house ended 2009 on a positive note, according to the latest government figures, but not much of one.
The average price of new and used houses sold in the country’s 32 largest metropolitan markets rose 1.3% in December, from $298,200 to $302,100, the Federal Housing Finance Agency reported.
While the increase is hardly one to jump up and down about, it was the largest gain recorded in the agency’s quarterly survey in several years. But proving once again that all real estate is truly local, the average was all over the ballpark in the 32 areas covered in the FHFA study.
The average was down in 13 of the 32 markets, in some cases by double digits. And in a couple of places, by more than 25%. At the same time, several spots reported double-digit gains, including a shocking 41.3% jump in the Dallas-Fort Worth area. Texas is one of the stars of the recent housing debacle, hardly feeling the effects of the meltdown that has driven prices down, down, down in California, Florida, Nevada, Arizona and a few other so-called sand states.
But a 41% gain is out-of-line, as is the equally surprising 27.8% in the average price of houses sold in the fourth quarter in San Antonio. A better explanation is that there were an abnormal number of transactions at one end of the price continuum than at the other end of the price continuum.
For example, in Dallas, there were probably a larger than usual number of deals in the upper-price brackets, and in San Antonio, just the opposite.
Las Vegas also reported a huge 27% drop in its average, again largely because the bargain hunters continue to sift through the coals of Sin City’s battered and bruised housing market. According to local real estate broker Rob Jenson of Re/Max Central, of the 3,000 properties which changed hands in December in the Las Vegas-Henderson area, 78% were considered “distressed,” either a foreclosure or a short sale.
Indeed, at last count, of the 18,000-plus houses listed for sale in the area, according to the Rob Report, nearly 15,000 of them were problem properties.
On a more positive note, California’s four largest markets posted good gains. But it was a mixed bag in Florida, with Miami-Fort Lauderdale enjoying a bit of a revival but Tampa and Orlando still suffering from a glut of condominiums.
On the strength of a 21.2% increase, the average in the large San Francisco-Oakland-San Jose market rose back above the $600,000 level. The average price of all houses sold in the Bay Area ended the year at $612,300 compared to $505,100 just one year earlier.
Again, however, it’s too early to declare that the housing recession is over in that market or any other place covered in the government survey. Twenty percent gains (or losses) over a 12-month period are more of an aberration than a true measure of housing price inflation, and should be looked at as such.
Nevertheless, the big jump solidified the Bay Area’s position atop the top 10 list of the nation’s most expensive housing markets. Looking back, San Francisco has held the No. 1 spot for as long as just about anyone can remember.
But No. 2 is a bit of a surprise. That would be the Seattle-Tacoma market, which ended 2009 with an average price of $475,000, a 12.1% gain from $423,700 in 2008.
The other three largest California markets are on the rise, too, reflecting, according to the state’s Realtor association, a rapidly dwindling supply of houses for sale.
Buyers in the Golden State seem to have sensed that the bottom is near, and have gobbled up houses to take advantage not just of the low prices but also highly affordable interest rates as well as the largesse of Uncle Sam, which is holding out a tasty $6,500-$8,000 tax credit as a carrot to get the housing market back on its feet.
San Diego is now the nation’s third most expensive place to buy a house, and Los Angeles is the fourth.
The average price in the San Diego area rose a reasonable 7.8% in the fourth quarter, pushing the final number for the year up from $437,400 to $471,600. In the Los Angeles area, the average rose 10.7%, from $413,800 to $458,200. (The fourth big California market, Sacramento, reported a 21.1% gain, from $282,800 in last year’s fourth quarter to $318,300 this year. But the yearend average wasn’t high enough to make the top 10 list this time around.) The nation’s capital is now the fifth most expensive place in the country to buy a house. Still, the average in the Washington-Baltimore region barely moved the needle in the fourth quarter, rising a scant 0.4%, from $444,300 a year ago to $449,000 when 2009 came to a close.
The sixth costliest housing market is a little higher on the Right Coast, the Big Apple. And here, too, there was a gain in the fourth quarter, though not much of one. The average in the New York area went up 1.2%, from $431,500 to $436,500.
Rounding out the top 10 list are Portland-Salem, Ore., where the average rose 13.7%, from $331,400 to $376,800; Norfolk-Virginia Beach, Va., up 0.7%, from $343,200 to $345,500; Denver-Boulder, an increase of 3.1%, from $331,400 to $341,700, and Boston-Worcester, down 0.8%, from $341,200 to $338,400.
Note that Bean Town is the only one of the nation’s 10 most expensive markets that recorded lower prices in the fourth quarter of last year. But it was minuscule compared to some of the other 13 places were prices went down.
San Antonio was down 27.8%, once of those aberrations mentioned above that brought the average there to under $200,000, $195,000 to be exact, compared to $270,000 just one year earlier.
Kansas City was down 19.4%, from $268,900 to $216,700. Phoenix dropped 15.2%, from $265,900 to $225,400. Pittsburgh dipped 14.1%, from $265,900 to $228,500. Orlando slipped 12.4%, from $257,700 to $225,500. And Tampa-St. Petersburg slid 9.6%, from $239,600 to $216,600.
Finally, Detroit-Ann Arbor was at the bottom of the list of 32 with an average price of just $189,900, this despite a surprising 24.7% gain, from $152,300.