A recent National Association of Realtors survey shows an increase in median price in existing single-family housing in most metropolitan areas from the first quarter of 2009. Overall, the western states saw the least increase and the northeastern states saw the most increase in home prices from a year ago.
Although the median price of a home dropped a bit for the entire country (0.7%), a quick glance at the NAR survey chart shows that two states, Michigan and Ohio, were seeing huge median home price increases from this time last year. Several city areas in these states showed significantly higher median prices than other cities survey. However, NAR’s chief economist, Lawrence Yun, notes: “Price gains in some Midwestern markets are not very meaningful because of comparisons to very high levels of distressed homes that were sold at huge discounts a year ago.”
As states in the West top the foreclosure list, it is not surprising that home prices in this region did not increase as much as other regions. In Arizona, Phoenix home prices increased 9.1% since the first quarter of 2009. However, its sister city to the south, Tucson, saw a median home price decrease of 5.4% in the last year with prices staying the same the last two quarters of 2009. Whereas Las Vegas, Nevada saw an even bigger median home price decrease of 11.8% in the last year. It’s taking longer for these states to pull out of the recession.
This median home price increase can be attributed, at least in part, to the homebuyer tax credits that ended on April 30, which is also the end of the first quarter. Home price increases can also be due to low interest rates.
What does this mean for today’s homebuyer? Have more confidence in the real estate market, as our economy appears to be slowly improving. Purchase homes for the long term, as the next home you buy should only go up in value.
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