Despite falling mortgage rates and home sales in the second quarter of 2022, a large number of metro areas experienced double-digit annualized price gains compared to the previous quarter, according to the National Association of Realtors’ latest quarterly report.
80 percent of the 185 metro areas tracked posted double-digit price gains, up from 70 percent in the first quarter of this year.
But in what may end up being good news, the Washington area was not among them.
Nationally, the median single-family existing-home price exceeded $400,000 for the first time, up 14.2 percent from a year ago to $413,500.
The year-on-year price increase was slightly lower than the previous quarter’s 15.4 percent.
“Home prices have increased at a faster pace than wage gains, especially for low- and middle-income workers,” said NAR Chief Economist Lawrence Yun. “Price declines have inevitably followed softening sales, providing a small measure of welcome relief for well-placed prospective buyers. The recent drop in mortgage rates will bring additional buyers into the market, especially in places where home prices are still relatively affordable and where jobs are being added.”
In the Washington area, the median sales price — half properties higher, half lower — stood at $626,700 for the quarter, up 9.7 percent from a year earlier.
The low price rate is a result of the DC market entering a course correction earlier in the year than many other metros, due to affordability issues as it rises (if still moderate by historical standards) mortgage-interest rates and a general sense of indifference about the economy.
Why is the low rate appreciation of the local area a good thing? As seen during the boom and bust of 2006-07, areas that tend to rise the most tend to lose the most value in the roller-coaster world of home sales. During that boom-bust cycle, the local area didn’t see the off-the-charts price increases of places like Las Vegas and Tampa, or the plunge that followed the good times that began in 2008.
But back to 2022. . .
Regionally, the South accounted for 44 percent of single-family existing-home sales in the second quarter and posted the largest price appreciation of 18.2 percent. Prices rose 12.7 percent in the West, 10.1 percent in the Northeast and 9.7 percent in the Midwest.
The top 10 metro areas with the largest year-over-year price gains all recorded increases of more than 25 percent, with seven of those markets located in Florida.
Big gainers include Fayetteville-Springdale-Rogers, Ark.-Mo. (31.9% increase); Lakeland-Winter Haven, Fla. (31.4%); Naples-Immokalee-Marco Island, Fla. (28.9%); North Port-Sarasota-Bradenton, Fla. (28.8%); Myrtle Beach-Conway-North Myrtle Beach, SC-NC (28.5%); Tampa-St. Petersburg-Clearwater, Fla. (28%); Cape Coral-Fort Myers, Fla. (27.8%); Punta Gorda, Fla. (27.4%); Ocala, Fla. (26.7%); and Ogden-Clearfield, Utah (25.5%).
“Local job-market performance and supply availability are the clear distinguishing factors driving local-home price growth,” Yun added. “Job growth is positive and should be applauded, but supply constraints are creating unnecessary barriers to ownership opportunities.”
The 10 most expensive markets in the US, half of which are in California, are San Jose-Sunnyvale-Santa Clara, California. ($1,900,000; up 11.8%); San Francisco-Oakland-Hayward, Calif. ($1,550,000; 11.9%); Anaheim-Santa Ana-Irvine, California. ($1,300,000; 17.2%); Urban Honolulu, Hawaii ($1,145,000; 17.3%); San Diego-Carlsbad, Calif. ($965,900; 13.6%); Boulder, Colo. ($933,400; 11.8%); Naples-Immokalee-Marco Island, Fla. ($850,000; 28.9%); Los Angeles-Long Beach-Glendale, Calif. ($825,700; 9.2%); Seattle-Tacoma-Bellevue, Wash. ($818,900; 14.4%); and Boston-Cambridge-Newton, Mass.-NH ($722,200; 8.9%).
Two other metro areas from Virginia were included in the survey: the median sales price in Richmond was $391,900 in the second quarter, up 13.6 percent, and the median sales price in Hampton Roads was $336,400, up 16 percent.