Housing-Price Growth Still Hot, But Pace Has Cooled Some

U.S. existing-home prices appreciated late last year, but at a slightly lower rate, an industry group says. Still, a record 72 metro areas had double-digit price increases for single-family houses.
By: Jeff Bater and Steve Kerch: The Wall Street Journal Online
Prices for previously owned U.S. homes appreciated late last year, but the double-digit growth was a bit cooler than it had been, an industry group says.

The national median existing single-family home price was $213,000 October through December, up 13.6% from $187,500 a year earlier, the National Association of Realtors, or NAR, said Wednesday. The median is the midpoint; that is, half of the homes sold for more than the median price and half sold for less.

In the third quarter of 2005, the annual rate of home-price appreciation was 14.7%.

The association's report, covering 145 metropolitan areas, shows a record 72 areas had double-digit annual increases in the median price of existing single-family home prices. Only six areas posted price declines. (See metropolitan-area data - Adobe Acrobat required.)

The biggest single-family price increase in the nation was in the Phoenix-Mesa-Scottsdale area of Arizona, where the fourth quarter price of $268,400 rose 48.9% from a year earlier. Next was Cape Coral-Fort Meyers, Fla., at $293,100, up 48% from the fourth quarter of 2004. Orlando, Fla., with a fourth-quarter median price of $261,800, was up 42% in the last year.

Detroit and Cleveland saw prices fall by less than 1%. The largest price decline, 5.3%, was recorded in the South Bend, Ind., metro areas. Other cities that saw declines included Erie, Pa., Lansing, Mich., and Springfield, Ill.

David Lereah, chief economist for NAR, said the modest dip in appreciation indicates a market adjustment. "Although home sales have eased, the tremendous momentum in price appreciation was sustained in the fourth quarter because tight inventories still favored sellers," he said.

Previously owned home sales dropped a third straight month in December. Resales fell to a 6.60 million annual rate last month, down 5.7% from 7.00 million in November. Sales were down 1.3% in November and 2.7% in October. Yet for all of last year, there were 7.072 million sales, which was 4.2% higher than the level of 6.784 million in 2004 and marked a fifth consecutive record. NAR began tracking sales in 1968.