The Wall Street Journal

14 May 2013

Home prices in metropolitan areas saw their biggest year-over-year gains in more than seven years in the first quarter, evidence that the housing recovery is spreading across the nation.

The National Association of Realtors said Thursday that the national median closing price for an existing single-family house was $176,600 in the first quarter, up 11.3% from the first quarter of 2012. That was the largest year-over-year gain since the end of 2005. Of the 150 metro areas tracked by the NAR, sale prices rose in 133 and declined in 17.

“The supply/demand balance is clearly tilted toward sellers in a good portion of the country,” said NAR chief economist Lawrence Yun.

The biggest gain was in Akron, Ohio, where the median sale price rose 32.7% to $108,300. Following Akron, prices were up 32.6% in the San Francisco-Oakland-Fremont area; 32.1% in Reno-Sparks, Nev.; 31.7% in the Silicon Valley area surrounding San Jose; 31.1% in Atlanta; and 30.1% in Phoenix.

Prices are still falling in Kankakee-Bradley, Ill., where they were down 18.8%. Prices declined 8.6% in Edison, N.J.; 8.3% in Allentown-Bethlehem-Easton, Pa.; 5.5% in Champaign-Urbana, Ill.; and 5.0% in Erie, Pa.

The NAR’s quarterly report is a good measure of general price trends, but the results can sometimes overstate the magnitude of price gains because they don’t control for shifts in the number of homes sold in various price categories. As a result, the median price can rise sharply if sales of higher-end homes increase faster than sales of lower-priced homes.

A companion study showed that despite the rise in prices, homes remain relatively affordable and low mortgage interest rates have given home buyers “ample buying power” in the current market, NAR said.

Median home prices posted annual gains in 133 of 150 metro areas in the first quarter of 2013. Home prices are in thousands of dollars.