Home Prices Higher In 71 Metro Areas

"Affordable housing and booming job markets have helped some metros buck the national trend of stagnant home prices"

"Even as national home prices saw their worst-ever decline last quarter, the median home price in the Atlantic City (N.J.) area shot up almost 26%, to $339,800, marking the sharpest year-over-year increase of any U.S. metropolitan area. Seventy-one other U.S. metro areas saw price gains in the fourth quarter of 2006 from a year earlier, including 14 metros with increases of 10% or more, according to a Feb. 15 report from the National Association of Realtors (NAR)."

"Five metro areas remained unchanged and 73 areas had price declines, contributing to an overall U.S. median home price drop of 2.7%, to $219,300, the biggest year-over-year decrease on record. Home prices in the Sarasota (Fla.) area fell 18%, the sharpest decline among the metro areas."

"Areas such as the Florida coast and Southern California saw the most speculation and consequently the most rapid price runups in the boom years. Places that didn't experience dramatic price appreciation until recently, including Atlantic City, Salt Lake City, Texas, and the Pacific Northwest, remained relatively affordable last year, drawing buyers and sending prices skyward."

"Economic law isn't the only factor driving home price gains in many metro areas. More than $2 billion in new construction in Atlantic City, including casinos, megaresorts, and shopping centers, is now attracting a "yuppie" crowd, according to Drew Fishman, president elect of NJAR and an Atlantic County-based realtor."

"Job creation also led to significant home price appreciation in some metro areas last year, especially in the Northwest states. Three Oregon metros—Salem, Portland, and Eugene—and two Washington metros—Seattle and Spokane—saw double-digit price growth in the fourth quarter of 2006."

"Our market just seems to keep chugging along," says Terry Miller, a realtor at Seattle-based Coldwell Banker Bain. In 2006, Seattle began a major redevelopment of its South Lake Union neighborhood to attract more biotech companies to the city. A large and increasing immigrant population in the Seattle area has also helped create demand for housing, Miller says. In addition, the Northwest region's price increases in recent years have not been as significant as in other parts of the U.S."

"Maybe the slump in national home prices isn't the housing market's biggest problem, as evidenced by the positive price changes in nearly half of the nation's metro areas. In fact, problems may just be starting for areas like Seattle, which could see prices get out of control. "Prices are so high now, it is a concern," says Miller."