Home prices in deep freeze
Second quarter numbers are in for more than 150 markets. Overall growth is down; more markets show declines. Plus: Where the strength still is.
NEW YORK (CNNMoney.com) -- After several years of turbo-powered growth, home prices have gone into a stall, according to the latest prices released Tuesday.
Nationally, the median home price rose just 3.7 percent to $227,500 from last year's second quarter to this year's, according to the National Association of Realtors.
It was the second consecutive quarter in which home prices failed to repeat the gains of more than 10 percent recorded throughout 2005.
Twenty-six markets of the 151 surveyed experienced price declines from a year ago, ranging from 0.1 percent (Columbus, Ohio) to 11.3 percent (Danville, Illinois). See prices for all 151 markets.
And at least 59 markets finished the quarter down from their highs set sometime during the previous three quarters. Boston, for example, showed a slight gain (0.6 percent ) compared with a year ago, but the city's median price of $304,700 was down from its high of $306,500 set in the third quarter of 2005.
Among big cities, Detroit cratered 8.0 percent and Cleveland sagged 5.2 percent.
"With more sellers competing for the pool of buyers, the pressure on home prices has evaporated in most metro areas. . . We are presently experiencing a soft landing in the housing sector," said NAR's chief economist, David Lereah, in a statement.
In the quarter, overall condo prices actually fell 0.3 percent to $225,800.
The condo market remained strong in Phoenix, where prices grew 25.3 percent in the past 12 months. Second was Trenton, New Jersey (23.3 percent). Honolulu's apartment market also did well (up 18.7 percent), though much of that gain came in previous quarters.
The worst condo markets included Palm Bay, Florida (- 11.8 percent), Toledo, Ohio (-9.7 percent) and Reno (-8.9 percent).
The slowdown in the quarter was anticipated, with several signs in recent weeks pointing in the same direction.
Last week two of the nation's homebuilders - Toll Brothers and Hovnanian Enterprises - projected lower sales and profits.
NAR's own report earlier this month forecasted a 6.5 percent drop in sales of existing homes for the year and pointed to a 3.8 percent increase in inventories, to a 6.8 month supply.
There has also been a spike in foreclosures, up 25 percent, according to RealtyTrac, which follows the foreclosure market, and an increase in delinquent mortgages compared with last year, according to statistics compiled by the Mortgage Bankers Association, NAR.
Where the strength is
Despite all the negative signs, some areas are holding up well.
Some of the best performers were in markets that welcomed a large number of Katrina refugees. In Baton Rouge, Louisiana, prices leaped 11.6 percent from last quarter and 27.3 percent from a year earlier. That was the biggest percentage gain of any metro area in the United States.
Nearby Beaumont, Texas gained 18.3 percent from a year ago.
Other strong markets included Ocala, Florida (up 25.3 percent for the 12-month period), Virginia Beach (23.6 percent) and Gainesville, Florida (19.3 percent). Los Angeles led the nation's largest cities, racking up a gain of 14.6 percent.
San Francisco slipped past San Jose to claim the dubious honor of sporting the nation's highest single-family home prices. The median price in the City by the Bay is now $751,900, up 3.4 percent for the past 12 months.
The Bay area also claimed the highest condo prices - a median of $647,200 - far higher than second-place Los Angeles ($410,500).