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Existing Home Sales Last Year in Pace With '86 : Median Prices on Rise, Especially in California

February 17, 1988|Associated Press

WASHINGTON — Sales of existing homes held steady in 1987 at close to 4 million units despite volatile mortgage rates and the October stock market collapse, a national real estate trade group reported Tuesday.

The National Assn. of Realtors said sales of existing single-family homes and condominiums totaled 3.885 million units last year, down a slight 0.3% from the 1986 level of 3.897 million. Sales in both years were the fastest pace of this decade.

Alaska and Louisiana, two states that had suffered a big slump in sales because of depressed energy industries, enjoyed a rebound last year, leading the country along with Massachusetts with the largest percentage gains.

Meanwhile, the nationwide median price of an existing home rose to $84,300 at the close of last year, an increase of 5.1% in 1987, slightly ahead of the rise in consumer prices, the association said.

New York City and Boston maintained their rankings as the most expensive places to buy homes while Providence, R.I., and Hartford, Conn., had the biggest percentage price gains out of 53 metropolitan areas surveyed.

The median price of an existing home was $180,800 in the New York area, which includes northern New Jersey and Long Island, and $178,600 in Boston during the last quarter of the year.

The San Francisco Bay Area ranked third with a median of $176,000, followed by Orange County at $174,500. Hartford, Conn., was fifth at $163,800, and the Los Angeles area was sixth at $145,200. San Diego was ranked seventh at $131,800.

At the other end of the scale, the most affordable housing was in Des Moines, Iowa, where the median sales price was $52,000.

The Northeast, which has been a hot real estate market for several years, had the four top cities in terms of percentage price increases. Home prices were up 32.2% in Providence; 21.7% in Hartford; 20% in Washington, D.C., and 18.2% in Albany, N.Y.

Fourteen cities that were concentrated in depressed energy and farm areas of the country saw home prices decline during 1987. The biggest price drop was 7.2% in Houston, followed by a 5.6% decline in Oklahoma City.

In all, 22 states enjoyed sales increases in 1987, led by a 26.2% surge in sales in Alaska and identical increases of 18.8% in Louisiana and Massachusetts. Alaska and Louisiana rebounded from big sales declines in 1986, while Massachusetts' increase followed a sizable 1986 advance.

Also enjoying big advances were Georgia, with an 18.5% increase, and North Dakota and Maine, with advances of 17.9% and 14.3% respectively.

"The Northeast continues as the strongest region, but we saw considerable strength in the South and Midwest, two areas which had been lagging the rest of the country," said John Tuccillo, chief economist for the realtors group.

Twenty-two states suffered sales declines last year, led by a 13.8% drop in Washington state. Sales fell 13.3% in Virginia, followed by declines of 9.7% in both Maryland and Oklahoma. Sales were off 9.5% in the District of Columbia.

Analysts said that one factor that pushed up 1986 sales was a last-minute rush to close sales and reap capital gains profits before the new tax law took effect on Jan. 1, 1987.

In a related report, the California Assn. Realtors said median home prices are rising much faster than income in California, making home ownership an elusive dream for many residents.

From 1970 to 1985, median family income rose 172%, to $29,500 from $10,800. But house prices during the same period shot up 385%, to $117,900 from $24,300.

Nationally, median income rose 181%, and the median home price rose 226%.

MEDIAN HOME PRICES: TOP 20 CITIES

The median sales price of existing U.S. homes was $84,300 from October through December--a 5.1% rise from the same period in 1986. Figures are based on a National Assn. of Realtors survey.

Price in Pct. Metro Area $1,000s Chg. New York 180.8 7.9 Boston 178.6 6.4 San Francisco 176.0 6.8 Anaheim 174.5 14.5 Hartford 163.8 21.7 Los Angeles 145.2 11.5 San Diego 131.8 10.9 Providence 127.4 32.2 Washington 122.4 20.0 W. Palm Beach 103.2 13.5 Chicago 91.5 6.6 Albany 90.2 18.2 Denver 86.4 0.7 Dallas 85.6 -4.7 Baltimore 84.4 13.6 Miami 80.3 1.5 Phoenix 80.3 3.1 Ft. Lauderdale 80.2 3.2 Minneapolis 80.8 4.4 Albuquerque 79.7 -2.8

Source: Associated Press

Los Angeles Times

HOME SALES: TOP 20 STATES More than 3.8 million existing U.S. homes were sold in 1987, a 0.3% decline from 1986. Figures are based on a National Assn. of Realtors survey.

Sales in Pct. State 1,000s Change California 507.0 4.6 Pennsylvania 259.5 0.5 Texas 224.3 12.8 New York 223.9 3.3 Florida 184.2 -8.7 Ohio 180.9 0.6 Illinois 175.3 -2.2 Michigan 169.6 -9.1 New Jersey 157.3 -1.4 N. Carolina 140.6 1.0 Virginia 113.0 -13.3 Tennessee 111.2 -0.7 Mass. 100.5 18.8 Indiana 89.8 4.3 Minnesota 89.4 -7.6 Georgia 89.0 18.5 Missouri 88.4 0.0 Maryland 78.5 -9.7 Wisconsin 73.3 -4.7 Arizona 67.3 -8.8

Source: Associated Press

Los Angeles Times

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