Overall prices increased during the third quarter of the year with the median existing home single family home price up in 87% of markets.
Some 154 out of 178 metropolitan statistical areas (MSAs) showing gains based on closings in the third quarter compared with the third quarter of 2014, the data from the National Association of Realtors (NAR) shows. And 24 or 13% of areas recorded lower median prices from a year earlier.
There were slightly fewer rising markets in the third quarter compared to the second quarter, when price gains were recorded in 93% of metro areas while 21 or 12% of metro areas in the third quarter saw double digit increases, a fall from the 34 metro areas in the second quarter. Some 16 or 9% of metro areas saw double digit increases in the third quarter of 2014.
According to Lawrence Yun, NAR chief economist, there is no question the housing market had its best quarter in nearly a decade. ‘The demand for buying picked up speed in many metro areas during the summer as more households entered the market, encouraged by favourable mortgage rates and improving local economies,’ he said.
‘While price growth still teetered near or above unhealthy levels in some markets, the good news is that there was some moderation despite the stronger pace of sales,’ he added.
The national median existing single family home price in the third quarter was $229,000, up 5.5% from the third quarter of 2014 when it was $217,100. The median price during the second quarter of this year increased 8.2% from a year earlier.
Total existing home sales, including single family and condo, increased 3.4% to a seasonally adjusted annual rate of 5.48 million in the third quarter from 5.30 million in the second quarter, and are 8.3% higher than the 5.06 million pace during the third quarter of 2014.
Yun explained that sales had the potential to be even higher last quarter given the decline in mortgage rates and favourable economic conditions. ‘Unfortunately, the lack of any meaningful gains in housing supply pushed prices in some areas above what some potential buyers, especially first time buyers, are able to afford,’ he added.
The five most expensive housing markets in the third quarter were the San Jose, California metro area, where the median existing single family price was $965,000, San Francisco at $809,400, Anaheim–Santa Ana, California at $715,300, Honolulu at $714,000 and San Diego at $554,400.
The five lowest cost metro areas in the third quarter were Cumberland, Maryland, where the median single family home price was $82,400, Youngstown–Warren–Boardman, Ohio, at $90,700, Decatur, Illinois at $101,400, Rockford, Illinois at $102,800 and Elmira, New York at $108,800.
‘Many of the metro areas with the fastest price appreciation over the past year were in the South, particularly in Florida. A combination of solid job gains, above average shares of vacation and foreign buyers and little new construction being added was behind these areas' faster price growth,’ said Yun.
Metro area condominium and cooperative prices, covering changes in 62 metro areas, showed the national median existing–condo price was $215,200 in the third quarter, up 2% from the third quarter of 2014 when it was $211,000 and 44 metro areas, 71%, showed gains in their median condo price from a year ago while 18 areas had declines.
At the end of the third quarter, there were 2.21 million existing homes available for sale, which is below the 2.28 million homes for sale at the end of the third quarter in 2014. The average supply during the third quarter was 4.9 months, down from 5.5 months a year ago.
NAR president Chris Polychron, said that the overall pool of potential buyers still outweighs what's available for sale in several markets this fall, adding that real estate agents are still reporting that many homes are going under contract more quickly than what's typical this time of year.
‘While this is certainly beneficial to home owners looking to sell, some are still reluctant to list out of concerns they'll have limited time and choices during their own home search,’ he added.
