Home prices fall in a third of the United States – and in LA County, according to statistics from the realtor – The Mercury News
“The survey says” examines various rankings and dashboards judging geographic locations while noting that these ratings are best viewed as a mixture of astute interpretation and data.
Buzz: House prices started 2022 with a one-third drop in US markets – including Los Angeles County – as rising interest rates, expensive options and a fragile economy seemed to cool the frenzy of pandemic era purchase.
Source: My trusty spreadsheet looked at quarterly statistics for the median selling prices of existing single-family homes in 185 metropolitan areas. followed by the National Association of Realtors. I focused on quarter-over-quarter price changes – instead of the year-over-year performance that inspired the headline “First Quarter of 2022 Brings Double-Digit Price Appreciation for 70% of metros”. on the association’s press release announcing the latest edition of these statistics.
Despite what you may hear about widespread price strength, the typical shopper paid less in 64 metros – or 35% of all markets tracked – between the first three months of 2022 and the fourth quarter of the year. last.
The declines were concentrated in smaller markets in the eastern United States. In fact, one of four regional indices for real estate agents — the Midwest Markets — fell 1%.
The weakest metropolitan performance was Rockford, Illinois, down 11.3% in three months, followed by Akron, Ohio, down 9.7%, Topeka, Kansas, down 9, 5%, from Springfield, Illinois, down 9.1% and from Binghamton, NY, down. 7.7%.
Of the eight California metros in the study, only LA County saw a quarterly decline of 0.7%. The closest losing market was 1,300 miles to the east – Oklahoma City, down 1.6%.
And, yes, the overall price index for real estate agents in the United States rose 2.1% for the quarter.
It’s not an anomaly. In fact, it’s an improvement over the end of 2021.
The fourth quarter saw even more price declines as 104 metros saw declines – or 56% of the nation. California Falls? Three of eight subways were down: LA County 7.3%San Diego by 0.6% and San Francisco by 3%.
Even the US price index fell 0.7% with regional declines in the Northeast (5%), Midwest (4.5%) and West (0.2%).
And last summer, 36 metros experienced price cuts, or 20% of the country. California’s declines in the third quarter included three of the eight metros: San Jose (2.9%), San Francisco (2.5%) and Orange County (0.9%). The US price index rose 1.5% with no regional decline.
This same calculation also details the spring madness a year ago. In the second quarter of 2021, there were no quarterly price declines in the country. The median in the United States increased by 12.4% during these three months.
At the end of the line
A few modest price cuts are not a real estate disaster. Yet the door-to-door sales industry is fortunate that pricing discussions often focus on year-over-year changes.
So owners and their sellers will focus on the fact that only three U.S. metros saw price declines in the 12 months ended the first quarter of 2022 — Cape Girardeau, Mo., by 2%, Topeka, Kansas, by 1.9 and Rockford, Ill., off 1%. They will also applaud prices nationwide which have increased by 15.7% over the same period.
Measuring economic trends by looking at changes over 12 months tends to smooth out the highs and lows of any benchmark – whether the volatility is related to seasonal variations, the short-term impacts of events, or simply noise in an economic yardstick. . But this statistical easing may also delay the much-needed reality check markets have for any asset at inflection points.
Consider how Wall Street fluctuations are perceived.
After a turbulent first three months this year, most investors focused on the 5% decline in the Standard & Poor’s 500 stock index between December 31 and March 31 – the first quarterly decline since the 20% plunge. at the start of the pandemic era.
This decline suggests that stock prices are not supported by economic fundamentals. Inflation puts a strain on household budgets and business results. Additionally, the pandemic, supply chain, and geopolitical uncertainties are undermining consumer and CEO confidence.
Few equity investors revel in the year-over-year result: the 15% gain in the S&P 500 between the first quarter and the same period a year earlier.
Let’s be honest. The reality of real estate is not very different. Prices defy economic logic. All of Wall Street’s general worries are amplified by the affordability of buying a home reduced by the apparent end of Federal Reserve-induced mortgage rate giveaways.
Remember that house hunters are practical people. At least those who are looking for a home and not an investment.
These people live here and now. They’re not looking for shelter by spending a lot of time thinking about prices a year ago. Price indices adjusted for seasonality, inflation, or length of ownership don’t change their budgets, mortgage rates, or what’s happening in the market.
The fall in prices at the start of 2022 is therefore good news.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]