Metro Area Real Estate Markets Faring Best Overall
In reviewing reports from the National Association of Realtors on real estate market health around the country, it would seem that the metro areas are faring the best over all with strong year over year price growth in the fourth quarter NAR report of 2013, and bodes well indeed for 1st quarter of 2014. However, a companion metro area annual affordability report shows less favorable conditions, particularly in the West.
Where to buy / not buy in Ohio or other states?
Interestingly, you can follow a lot of relocation activity to these areas from states that continue to suffer economically with job availability and affordability of housing. Let's all hope interest rates and lending policies on credit stay reasonable for the average buyer, and that unemployment diminishes nationwide this year.
Midwest and Eastern Metro Real Estate Markets:
- Here in the Midwest to the East, including Ohio, The five lowest-cost metro areas were Toledo, Ohio, with a median single-family price of only $80,500; Rockford, Illinois with, $81,400, Cumberland, Maryland at $89,500, Elmira, New York at $99,500 and South Bend, Indiana with a quite comfortable median price of $101,100.
Western Metro Area Real Estate Markets:
- The five most expensive housing markets in the fourth quarter were the San Jose, Calif., metro area, where the median existing single-family price was $775,000; San Francisco, $682,400; Honolulu, $670,800; Anaheim-Santa Ana, Calif., $666,300; and San Diego, where the median price was $476,800.
Metro Real Estate Markets Overall; Where's it Going?
The median existing single-family home price increased in 73 percent of measured markets, with 119 out of 164 metropolitan statistical areas (MSAs) showing gains based on closings in the fourth quarter of 2013 compared with the fourth quarter of 2012. Forty-two metro areas enjoyed a 26 percent double-digit increase, two were unchanged and 43 recorded lower median prices. As you can see, the lion's share of metro area markets are gaining a little strength and stability. You will still want to use a professional and knowledgeable buyers' agent familiar with the local markets that can competently provide highest price analysis or "CMA" (Comparative Market Analysis) along with a good slice of the local real estate market history and trends. Having a professional Realtor with sound experience can make a huge difference in your long term outcome.
While there are less rising markets than seen in the third quarter 2013, when price increases were recorded in 88 percent of metro areas from a year earlier, with 33 percent rising at double-digit rates, reflecting a slowdown in price growth, we have still seen growth overall all, but a more steady, slower climb back to healthier real estate markets rather than a rash, unjustified and artificially inflated spurt.
National Association of Realtors Chief Economist Warns;
Lawrence Yun, NAR chief economist, said there are two ways of looking at the price gains. "The vast majority of homeowners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending," he said. "At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability."
Again, let us hope for continued reasonable interest rates and that the lending pendulum doesn't swing fully the other way from the sub prime lending practices of the past with too tight a grip on credit and qualifications. A calm and stable lending market is needed now, not lender paranoia.
Yun said that tight supplies in many areas accounted for double-digit price growth. At the end of the fourth quarter there were 1.86 million existing homes available for sale, slightly above the fourth quarter of 2012, when 1.83 million homes were on the market. The average supply during the quarter was 4.9 months; it was 4.8 months in the fourth quarter of 2012. A supply of 6.0 to 6.5 months represents a rough balance between buyers and sellers.
Yun added, "New home construction activity needs to increase significantly in the fast appreciating markets to help relieve upward price pressure." In 2013, housing starts totaled 924,000, well below the historic average of 1.5 million units that typically are needed.
"Added housing supply will help moderate price growth this year, and should help to stem erosion in affordability, but mortgage interest rates are projected to rise above 5 percent by the end of the year," Yun said.
Ohio Real Estate, Like All Other Markets: A Local Phenomenon
The national median existing single-family home price was $196,900 in the fourth quarter, up 10.1 percent from $178,900 in the fourth quarter of 2012. In the third quarter the median price rose 12.5 percent from a year earlier. The median price is where half of the homes sold for more and half sold for less. Distressed homes – foreclosures and short sales generally sold at discount – accounted for 14 percent of fourth quarter sales, down from 24 percent a year ago.
Now, while national statistics are great for gaining an overall picture, it's important to keep in mind that while one state over there could be horrifying market conditions, the next state could be demonstrating solid good growth and healing. I cannot stress strongly enough as a real estate professional and Ohio Realtor that real estate is a highly local phenomenon and the best outcomes are achieved by enlisting the help of a competent professional that can show you the history; sold, expired (overpriced), growth or decline, etc., and do the comparative market analysis so you don't over pay, and gain a solid investment.