Ed Rooney for Live With a Net © Publications
May 25, 2005
An upward trend in overall price appreciation, with increases in existing-home prices is occurring, according to the latest survey by the National Association of Realtors (NAR).
A record of 66 areas have shown double-digit annual increases in median existing single-family home prices, beating the previous record of 62 in the fourth quarter of 2004. National median existing single-family home price were up 9.7% to $188,800 in the first quarter, from $172,100 the last quarter.
Currently, the tight supply of homes available for sale does not meet the demand by buyers. Being drawn into the market by lower mortgage interest rates are new households, with many becoming disappointed by the inability to find a home that can meet their needs. It has been theorized that the supply situation may improve next year, when interest rates should be slightly higher, which may result in less demand and price appreciation.
The strongest price increases were in the west, with the median existing single-family home price rising to $282,900, up 16.9 percent from last year. Double-digit annual price gains were experienced in western areas, including Anaheim, Las Vegas, Los Angeles, Phoenix, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, Santa Ana and Seattle.
NAR President Al Mansell believes buyer should be prepared, “If home buyers find themselves in a market where price-bidding is common, they need to have a handle on comparable market values and avoid the temptation to take shortcuts,” he said. “It’s especially important to understand loan terms – a real estate professional can help you to avoid riskier products, in addition to walking you through the transaction process.”
In those areas that showed price declines, none of them had experienced rapid price growth previously, being lower-cost markets that experienced economic weakness, in jobs, or a large supply of available homes in the local market.
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