Despite escalating mortgage rates and slumping home sales in the second quarter of 2022, a greater number of metropolitan areas experienced double-digit annual price gains compared to the prior quarter, according to the National Association of Realtors’ latest quarterly report.
Eighty percent of the 185 tracked metro areas posted double-digit price gains, up from 70 percent in the first quarter of this year.
But in what could end up being good news, the Washington region was not among them.
Nationally, the median single-family existing-home price eclipsed $400,000 for the first time, rising 14.2 percent from one year before to $413,500.
Year-over-year price appreciation eased slightly compared to the previous quarter’s 15.4 percent.
“Home prices have increased at a pace that far exceeds wage gains, especially for low- and middle-income workers,” said NAR chief economist Lawrence Yun. “Price deceleration inevitably followed the softening sales, providing well-positioned prospective buyers a small measure of welcomed relief. The recent dips in mortgage rates will bring additional buyers to market, especially in those places where home prices are still relatively affordable and where jobs are being added.”
In the Washington region, the median sales price – the point at which half of properties sell for more, half for less – stood at $626,700 for the quarter, up 9.7 percent from a year before.
The lower rate of appreciation likely is the result of the D.C. market entering a course correction earlier in the year than many other metros, owing to affordability issues that then were exacerbated by rising (if still moderate by historic norms) mortgage-interest rates and a general sense of skittishness about the economy.
Why might the local region’s lower rate of appreciation be a good thing? As was found during the 2006-07 boom and subsequent bust, those areas that tended to go up the most also tended to then lose the most value in the roller-coaster world of home sales. During that boom-bust cycle, the local region saw neither the off-the-charts price increases of places like Las Vegas and Tampa, nor the plunge that occurred after the good times went sour starting 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 increased 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 greater than 25 percent, with seven of those markets located in Florida.
The big gainers include Fayetteville-Springdale-Rogers, Ark.-Mo. (up 31.9%); 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, S.C.-N.C. (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%).
“The 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 restraints are creating unnecessary barriers to ownership opportunities.”
The 10 most expensive markets in the U.S., half of which were in California, included San Jose-Sunnyvale-Santa Clara, Calif. ($1,900,000; up 11.8%); San Francisco-Oakland-Hayward, Calif. ($1,550,000; 11.9%); Anaheim-Santa Ana-Irvine, Calif. ($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.-N.H. ($722,200; 8.9%).
Two other metro areas from Virginia are included in the survey: The median sales price in Richmond stood at $391,900 in the second quarter, up 13.6 percent, and the median sales price in Hampton Roads was $336,400, up 16 percent.