In the second quarter of ‘06 home prices crept upward, but slowed considerably from ‘05, reports Bloomberg
Prices for single-family homes rose an average of 1.17 percent during the quarter, compared with 3.65 percent growth in the second quarter of 2005. The drop was the biggest since the agency began keeping records in 1975. The report doesn’t give an average price, only the percent of change.
The report attributed the decline in price appreciation to increases in interest rates and greater inventory levels. The Office of Federal Housing Enterprise Oversight (OFHEO), which issued the report made several interesting discoveries:
“- Price appreciation remains relatively robust in the two states hardest hit by Hurricane Katrina one year ago—Louisiana and Mississippi. Four-quarter appreciation rates were well above the national average in several cities in the area including: New Orleans-Metairie-Kenner, Gulfport-Biloxi, Baton Rouge, and Pascagoula. Gulfport-Biloxi and Pascagoula in fact logged their highest appreciation rates since the beginning of OFHEO’s Index.
- Despite a nine percentage point decline in its four-quarter appreciation rate, Arizona’s housing market still exhibits the highest appreciation rate among the 50 states. Prices were up roughly 24 percent compared to the second quarter of 2005 but grew only 2.94 percent in the most recent quarter.
- While the 20 Metropolitan Statistical Areas (MSAs) with the highest appreciation included nine cities in Florida, the representation of other states continues to increase. MSAs in North Carolina, South Carolina, and Washington State have now entered the list of fastest appreciating markets.”
Take a look at house appreciation rates by state over the past quarter, year, 5-years, and since 1980:
As you can see from the report, Arizona and Florida led the charge over the past year. Idaho, Oregon, and Washington followed, as the Northwest continues to be hot in ‘06.
We’ll continue to bring you more information, analysis, and data from this report in upcoming posts. . .
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{ 3 comments… read them below or add one }
good stuff Joshua – Note that the “drop” is a drop in appreciation rate. Not a drop in home prices. It really looks like we’re heading for actual price drop, but we’re not there yet!
Hey Mike – Thanks. I’m sure you noticed that once you read the post, you’ll see that the drop I refer to was in appreciation rate. All my best.
Normal Market –
In a normal market, there is fairly a large number of homes available and an average number of buyers. This market does not necessarily favor the buyer or the seller. A seller may not have as many offers on their home, but he or she may not be desperate to sell either. Again, it is the buyer’s responsibility to be prepared. During a normal market, the chances to negotiate are higher than in a hot market. As a buyer, you can expect to make offers at lower than the asking price and negotiate a price at least somewhat less than what the sellers are asking.