Renewed appreciation
New-home prices are on the rise again after months-long downward trend.
NEW-HOME PRICES ARE ON AN UPward swing after trending downward for several months. After falling 1.4 percent in June, the median sales
CALIFORNIA TOPS LIST
When it comes to price appreciation, though, all areas are not created equal. San Francisco's escalating housing prices are well-documented, but it's not alone in dropping affordability. Neighboring California markets, including Salinas and Santa Cruz, have also seen rates skyrocket in the past year.
Of the top 10 MSAs with the fastest-rising prices, eight are in California, according to the Office of Federal Housing Enterprise Oversight (OFHEO). San Jose tops the list, with a 25 percent increase in prices for the 12 months ending in June, compared with No. 5-ranked San Francisco, which had a 20 percent increase. The two top 10 markets outside the Golden State are Denver, ranked 10th, and Barnstable-Yarmouth, in Massachusetts, ranked 7th.
IMAGE GRAPH 7PRICES UP: The new-home median sales price rose 3.8% in July to $166,100; existing-home prices increased 2.2% to $143,300. Some markets are hotter than others; of the 10 MSAs with the fastest-rising prices, eight are in California.
IMAGE GRAPH 8SINGLE-FAMILY STABILITY: Total housing starts stabilized, rising 0.3% in August to a rate of 1.531 million, but 7.6% below August 1999's rate of 1.657 million. Single-family starts grew 4.6% to 1.261 million, but multifamily fell 17.2% to 230,000 from July's rate of 278,000.
The state-by-state ranking shook out differently, with Massachusetts ranked first, followed by New Hampshire, Colorado, and Minnesota. California came in fifth.
OFHEO also reported the MSAs with the lowest rates of home appreciation. That dubious distinction belongs to Porterville, Calif. Others in the bottom five include Honolulu, York, Pa., and Spokane, Wash.
WHAT PRICES MEAN
Drawing conclusions about changes in median prices can be problematic. For example, does an increase indicate a trend toward more expensive or larger homes or is it simply a result of builders raising their prices?
A significant problem with both the new- and the existing-home price data is that neither data set adjusts for changes in the size of homes or the amenities within them, points out Stanley Duobinis, the NAHB's director of forecasting. "In fact, neither set adjusts for changes in mix either-that is, more upscale homes as a share of the total sold in one month vs. another," he says. "Even if prices don't change, a shift in the mix of sales can cause a change in the reported price."-Roberta Maynard and NAHB Economics Department
IMAGE GRAPH 20MIXED SIGNALS: Consumer confidence was off slightly at 107.3, while a measure of whether consumers think it's a good time to buy a home increased to 138.
IMAGE GRAPH 21TWO AND TWO: Both the Midwest and West showed starts declining 5.6%. The South had the best month in August, increasing starts by 1.9%, while the Northeast increased 1.4%.
IMAGE GRAPH 22MULTIFAMILY FALL: Total permits, 1.468 million, were 11.5% short of August 1999's total of 1.658 million. Single-family climbed to 1.140 million; multifamily plummeted 22.4% to 263,000.
IMAGE GRAPH 23PLATEAU: September's Housing Market Index remained unchanged from August, at 61. The NAHB says this is indicative of a stabilizing housing market.
IMAGE GRAPH 24GOOD SIGNS: Thirty-year conventional loans fell to 7.88% in September; ARMs declined slightly to 7.26%. A year ago the rates were 7.82% and 6.22%, respectively.
IMAGE GRAPH 25NEW-HOME SALES BOUNCEBACK:
July's new-home sales shot up 14.7% to a rate of 944,000, 0.9% above July 1999's rate of 936,000.
IMAGE GRAPH 26NO BIG CHANGE: The price for 1,000 board feet of framing lumber fell again to $280 in September; structural panel prices went up to $253 per 1,000 square feet.
In addition, make sure to read these articles:
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