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Wednesday, November 21, 2007

Home Prices Rise in Most Metro Areas; Majority Show Modest Gains

The vast majority of metropolitan areas showed rising or stable home prices in the third quarter with most experiencing modest gains compared with a year earlier, despite a broad decline in existing-home sales, according to the latest quarterly survey by the National Association of Realtors (NAR).

In the third quarter, 93 out of 150 metropolitan statistical areas show increases in median existing single-family home prices from a year earlier, including six areas with double-digit annual gains and another 21 metros showing increases of 6 percent or more; 54 had price declines, and three were unchanged. Regionally, prices rose in both the Northeast and Midwest, as did the national condo price.

Lawrence Yun, NAR chief economist, says the data underscores the fact that all real estate is local. "Some metro areas are hot while others are experiencing localized problems," he says. "The report also shows that home prices in the vast midsection of America, from the Appalachians to the Rockies, are affordable and, perhaps, even undervalued.

"This quarterly metro home price report is the most meaningful long-term series available on price performance because it looks at all of the available transactions in a given area," he adds. "Unlike other home price series that are based on county records and mortgage securities, which are collected well after the actual transaction date, NAR has the most timely information directly from multiple listing services. We also report actual market prices rather than just the percentage changes so people can compare housing values around the country."

Even with most areas showing improvement, a disruption in higher priced sales impacted the national median existing single-family home price, which was $220,800 in the third quarter, down 2.0 percent from the third quarter of 2006 when the median price was $225,300. The median is a typical market price where half of the homes sold for more and half sold for less.

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