Home prices show sharp increases, led by Phoenix and Orlando | VailDaily.com

Home prices show sharp increases, led by Phoenix and Orlando

WASHINGTON – The booming housing market kept pushing prices higher in the summer months, led by supercharged gains in Phoenix and Orlando.In all, the National Association of Realtors said Tuesday that 69 metropolitan areas – almost half of the 147 cities surveyed – had double-digit price gains in July through September, compared to the same period a year ago.However, some analysts said that the red-hot housing market may be starting to cool off under the impact of rising mortgage rates. Freddie Mac reported that the 30-year mortgage climbed to a two-year high of 6.36 percent last week.”I think we are seeing a peak in housing,” said David Wyss, chief economist at Standard & Poor’s in New York. “There is anecdotal evidence that houses are staying on the market a little longer and prices seem to be leveling off.”The National Association of Realtors said that the median price of an existing home rose by 14.7 percent in the July-September quarter to $215,900, compared with a median price of $188,200 a year ago. The median is the midpoint where half the homes sold for more and half for less.The nation’s hottest markets far outperformed the nationwide figure. The biggest price increase occurred in the Phoenix-Mesa-Scottsdale area, where prices jumped to $268,000, 55.2 percent higher than the third quarter of 2004.Orlando has the second-biggest increase, a gain of 44.8 percent to $261,300, followed closely by Cape Coral-Fort Myers, Fla., where home prices were up 42.5 percent to $277,600.Economists said they did not expect to see the kind of devastating plunge in home prices that occurred when the stock market bubble burst in 2000, wiping out trillions of dollars in paper wealth, but they expected sales to fall and price increases to level off and perhaps decline in some of the hottest markets.”We should see much slower growth in prices beginning in the fourth quarter and outright price declines in some areas,” said Mark Zandi, chief economist at Economy.com, a private consulting firm.But the Realtors predicted solid sales next year with a better balance between supply and demand.”The good news is that inventory levels are improving and housing supply will come closer to buyer demand in 2006,” said David Lereah, chief economist for the Realtors. “We expect a healthy and more balanced market next year.”The Realtors’ survey found that six metro areas did see actual price declines in the summer, compared to the same period a year ago. Analysts said those price declines reflected areas that were experiencing local economic weakness such as job layoffs or a glut of homes on the market.The six areas with price declines were led by Elmira, N.Y., where prices fell by 5.4 percent to a median price of $77,100 this summer, compared with $81,500 in the third quarter of 2004.In a separate report, the Realtors said that sales of existing homes were up 6.5 percent in the third quarter with 16 states seeing double-digit sales gains compared to sales activity in the third quarter of 2004. The gains were led by a 32.1 percent increase in Arkansas and a 26.6 percent sales increase in Utah.—On the Net:Realtors report on home prices: http://www.realtor.org

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