David Lereah, NAR’s chief economist, said in a statement, “Although home sales have eased, the tremendous momentum in price appreciation was sustained in the fourth quarter because tight inventories still favored sellers. The good news is that the supply of homes on the market has been trending up and we are entering a period of a more normal balance in supply and demand.”
The market is more balanced in supply and demand now than it was in 2005. Those who were hoping to take advantage of a slower market will find their hopes lost in the current one, despite what they may have heard from various media pundits and Wall Street analysts.
The national median existing single-family home price was $213,000 in the fourth quarter, up 13.6 percent from a year earlier when the median price was $187,500. The median is a typical market price where half of the homes sold for more and half sold for less. In the third quarter of 2005, the annual rate of home-price appreciation was 14.7 percent.
The biggest single-family price increase in the nation was in the Phoenix-Mesa-Scottsdale area of Arizona, where the fourth quarter price of $268,400 rose 48.9 percent from a year earlier. Next was Cape Coral-Fort Meyers, Fla., at $293,100, up 48 percent from the fourth quarter of 2004. Orlando, Fla., with a fourth-quarter median price of $261,800, was up 42 percent in the last year.
Tampa Bay also showed price appreciation in some markets.
The strongest gains in condo prices were in the Phoenix-Mesa-Scottsdale area, where the fourth quarter price of $175,600 jumped 50.9 percent from a year ago. In the Tampa-St. Petersburg-Clearwater area of Florida, the median condo price of $185,400 rose 37.1 percent from the fourth quarter of 2004, while the Honolulu area, at $300,000, increased 36.4 percent. In all, 52.9 percent of the available markets experienced double-digit annual condo price appreciation. The condo price series will be expanded in the future as more data becomes available.
There were some high gains in the fourth quarter, but the market has normalized since then. Buyers expecting to do what some say is to try and “steal” a home from a seller during price negotiations would be better off to stay home, rather than trying to buy one. The market is balanced now, not stagnant, and most prices reflect that. A serious buyer who is reasonable will find more success in a balanced market when negotiating with a seller. A seller who overprices their property, though, expecting a quick sale for asking price is likely to find the conveyance of their own disappointment, rather than the conveyance of their property.Powered by Sidelines