Not all pricing news is gloomy

Housing prices continued to climb in the third quarter, according to the only national survey that covers the sale of both new and existing homes.
By: Lew Sichelman: latimes.com
The ascent wasn't nearly as relentless — just 3.1% — but prices are still rising nonetheless, according to the quarterly figures from the Federal Housing Finance Board.

The average in the nation's 32 largest markets was $326,700 as of Sept. 30, up from $317,000 a year earlier. Of the 32 markets, 19 showed increases, including surprising double-digit gains in several places.

Like studies conducted by other government agencies and the National Assn. of Realtors, the housing finance board's survey is not without drawbacks. It doesn't include houses sold with government financing, for example, so the numbers tend to skew a bit higher.

But it is the only one that includes new homes, and new homes typically are price leaders on which all other sellers base their asking prices. And in most places, builders are holding the line on their prices.

Builders may be offering all sorts of incentives — help with financing, free options and upgrades, free vacations and even free cars. But most have not resorted to cutting their prices.

Another take-away from the latest survey is the old real estate bromide that houses in good neighborhoods that show well and are priced right will sell, even in a market where many buyers are afraid to pull the trigger because they've heard nothing but doom and gloom about the faltering housing sector.

Nationally, there are some surprising numbers. One is that Las Vegas showed a whopping 18.9% gain in housing prices. Las Vegas, of course, is the poster child for all things bad in the housing market. The place is so overbuilt that several developers there have canceled major projects — not just put them on hold but scratched them altogether. Yet the average selling price in Sin City was $402,100 in the third quarter, up from $338,200 a year earlier.

Of course, some of that gain is a result of more than the usual number of houses and condos selling in the higher price ranges. But that's exactly the point. Good houses, good places, good prices equal sales in any price bracket.

Two other markets also nailed double-digit increases in the third quarter. Columbus, Ohio, sported better than a 14.5% gain, from $210,100 to $241,300, in the 12-month period covered by the latest government numbers. And Portland, Ore., was up 13.2%, from $297,900 to $337,300.

None of the 13 "down" markets had double-digit declines. But three came close. In Detroit, prices fell about 9.8%, from $202,100 to $182,200. In Boston, they dipped about 9.1%, from $411,700 to $374,100. And in St. Louis, they dropped 9%, from $230,500 to $209,800.

But part of the decline is related to more activity than normal in the lower end of the market. And again, at least houses were selling in those places.

As usual, San Francisco is the nation's housing price leader. Prices in the Bay Area averaged $667,300 in the third quarter, a gain of about 2.8% from $649,300 last year at this time.

San Diego, the country's second-priciest housing market, also showed a small increase. The average there was $568,100, up about 2.1% from $556,200. And the average of housing sold in No. 3 Los Angeles rose 8.9%, from $517,800 to $563,700.

The fourth and fifth most expensive places also sported gains. In New York, the average grew price 5%, from $468,700 to $492,300. And in Washington, D.C., the average price rose 9%, from $448,200 to $489,000.

At the other end of the price spectrum, prices fell in four of the five least-expensive places among the nation's 32 largest metro areas. Only the fifth-least expensive spot, San Antonio, registered a gain.

The bottom five are Dallas at $181,500, down 1.9% from $185,000; Detroit at $182,200, off 9.8% from $202,100; Indianapolis at $183,600, down 5.4% from $194,000; Kansas City at $188,000, off 1% from $189,900; and San Antonio at $189,100, up 7.6% from $175,800.