Are we there yet? Are we there yet? Are we there yet?
More than five years after home values began their monumental slide from the heights of the real estate bubble, a recovery remains elusive.
The latest survey from the National Association of Realtors shows the median sales price of an American home in the second quarter of this year was $171,900, down 2.8 percent compared to the same time last year.
Overall, prices fell in 109 of 151 metropolitan markets. Only New England showed an annual rise in housing values on a regional basis, rising 2 percent, to a median price of $245,600. The Midwest, South and West regions all declined, falling 5.4 percent, 2.7 percent and 3.1 percent, respectively.
Since the rapid decline in housing values slowed in 2009, home values have never added or lost more than 5 percent year-over-year.
“Median home prices have been moving up and down in a relatively narrow range in many markets, which shows a stabilization trend,” NAR Chief Economist Lawrence Yun says. “Markets showing consistent price stability or increases are those with solid labor market conditions, such as in Washington, D.C.; San Antonio; or Fargo, N.D.”
The dismal news in the Realtors’ report carried over to sales volume, which fell 12.7 percent since the same time last year. That drop may be due in part to numbers from a year ago being artificially inflated; the first-time homebuyer credit expired April 30 of last year.
The expiration of the tax credit in the second quarter may explain the smaller percentage of first-time homebuyers in the market. First-time buyers accounted for 35 percent of the overall market in the second quarter of 2011, down from 46 percent the same period last year.
NAR President Ron Phipps seems to agree. “It’s frustrating for many creditworthy potential homebuyers to realize that when they’re ready to make a move, banks remain risk averse,” he says. “People with good jobs, long-term plans and who are willing to stay well within their means deserve an opportunity to realize their American dream of homeownership. When banks return to normal and safe but sensible lending standards, housing will be able to contribute its traditional share to economic growth.”
So like the young child on a road trip who asks “Are we there yet?” We must learn patience. And for those who have been patient, the rewards can be achieved as shown by the areas listed below.
The news wasn’t all bad for homeowners. Some areas showed substantial price gains. After years of being hit hard by the housing crash, Cape Coral-Fort Myers, Fla., showed a 17.9 percent rise in home values. Elmira, N.Y.; Dallas-Fort Worth-Arlington, Texas; and Grand Rapids, Mich., rounded out the list of double-digit gainers, rising 16.1 percent, 12.5 percent and 10.9 percent, respectively.
Are home values done dropping in the Portland condo market? To answer that question may be a bit tricky but you need to look at several factors. There are no new projects on the horizon so inventory issues will start to be a factor. Rentals? The rental market is hot! We are seeing increased rental fees. At some point, it becomes cheaper to buy then to rent and with rates so incredibly low, we may now be at that point! The key will be to be patient and seek good value. There are still many overpriced Portland condos and lofts in the market. Many current sellers are just not being realistic on their selling price. The condos that are getting sold are units that were fairly priced from the start.