Most Cities Show Annual Gains in Home Values

By:: Kirk Haverkamp | May 12, 2010

A majority of U.S. cities are seeing gains in housing prices, even home values nationwide have remained flat, according to new figures from the National Association of Realtors (NAR).

Single-family home values in three out of five U.S. metropolitan areas surveyed were higher in the first quarter of 2010 than they were one year before, according to the NAR, with one in five posting double-digit increases. Price declines were reported in two out of five communities.

The survey of 152 metropolitan areas showed significant improvement in home values from the fourth quarter of 2009, when roughly twice as many communities showed annual price declines as showed annual gains.

Overall, median home values were relatively flat compared to one year ago, with the national median value of $166,100 in the first quarter of the year representing a decline of 0.7 percent from the $167,300 reported in the first quarter of 2009.

Lawrence Yun, NAR chief economist, said the evidence of stabilizing home prices is encouraging.

“This flattening in home prices is something we’ve been seeing in all of the home price measures lately, and quite clearly in this metro area price report,” Yun said. “The tax credit has been very effective in drawing down excess inventory, with about one million additional sales resulting directly from the stimulus.”

Actual sales volume for homes of all types – including single-family, condominiums and townhouses –declined in the first quarter of the year, to an annual rate of 5.14 million units in the first quarter of the year, down from a rate of 5.97 million in the fourth quarter of 2009.

Yun said the fourth quarter figures were boosted by the original homebuyer tax credit, which expired in November. He said a more meaningful figure was the 11.9 percent annual gain the first quarter figures represented over the 4.61 million rate reported in the first quarter of 2009, because of sales swings caused by the tax credit.

NAR President Vicky Cox Golder said that while home buyer confidence is improving, the market continues to be constrained by mortgage issues, despite recent easing of credit. She said that one-third of NAR members report that their biggest challenge remains the difficulty potential clients have in obtaining mortgages.

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