Tue, March 24, 2009
Housing Prices Still in Decline In Most Areas
Today I received updated figures from First American CoreLogic, which maintains one of the nation’s largest databases on residential property transactions. Their January results confirm a wide disparity in housing price changes across the U.S. over the last year. In general, the news is not good.
The metro Boston data, reflecting a single-family home price decline of 7.25% for, were tame in comparison with several metro areas in California and Florida, where annual price declines exceeded 20%. A recent issue of Boston Magazine reports considerable differences in price behavior among Boston metro communities. Areas like Arlington and Brighton saw little or no price changes over the last year, while some Boston neighborhoods registered double-digit declines.
Average single-family home prices in Our Fair City actually increased by almost 16%, though this could be misleading: single-families constitute less than 10% of Cambridge’s housing stock, and the statistics might merely reflect a shift in the proportion of sales from the low to the high end of a rather small market.
According to the Boston Business Journal, in Massachusetts home prices and the number of home sales versus last year dropped in January. For single-families, the number of sales was down 20% and prices declined an average of 10.3%. Condo sales hit a 17-year low, with January sales down 29% and prices down 22%
It's likely that the broad housing market will continue to be in a slump for the rest of 2009. Yet as I’ve noted in the past, housing markets are intensely local, so there will be some areas that experience appreciation even as others continue to tank. Home buyers will need to be diligent shoppers. In particular, condominium shoppers will need look carefully at (1) the proportion of rented units and (2) the presence of foreclosed units in condo associations in which they’re interested. Lenders are likely to be picky about making condominium loans; a significant level of non-owner occupied units or one or two foreclosed units will make some banks reluctant to offer loans with attractive terms.
The full table of metro housing data is found at CoreLogic's web site, but I've listed several major metro areas to illustrate the wide range in housing market behavior:
Table 1: A sampling of Single-Family Housing Market Price Changes, Jan. 2008-Jan. 2009
Miami-Miami Beach | -28.79% |
Los Angeles-Long Beach-Glendale CA | -25.14% |
San Diego-Carlsbad-San Marcos CA | -21.99% |
San Francisco-San Mateo-Redwood City CA | -15.12% |
Washington-Arlington-Alexandria | -14.77% |
Chicago-Naperville-Joliet | -13.12% |
Portland-Vancouver-Beaverton OR-WA | -11.62% |
Seattle-Bellevue-Everett | -11.48% |
New York-White Plains-Wayne NY-NJ | -8.46% |
Boston-Quincy MA | -7.25% |
Charlotte-Gastonia-Concord NC-SC | -4.38% |
Atlanta-Sandy Springs-Marietta GA | -3.58% |
Detroit-Livonia-Dearborn MI | -3.44% |
Philadelphia PA | -2.85% |
Denver-Aurora CO | +0.97% |
Dallas-Plano-Irving TX | +1.54% |
Houston-Sugar Land-Baytown TX | +3.58% |
Source: First American CoreLogic |