WASHINGTON – The sizzling housing market may have cooled at the end of 2005, but still-surging home prices did not reflect it, according to a report Wednesday from a real estate trade group.
The National Association of Realtors said a record 72 metropolitan areas had double-digit gains in sales prices for existing homes in the final three months of 2005 when compared with the same period a year earlier.
Overall, some 145 metropolitan areas that were surveyed.
The previous record, in the fall of 2004, was 69 cities with double-digit price increases for existing homes.
"Although home sales have eased, the tremendous momentum in price appreciation was sustained in the fourth quarter because tight inventories still favored sellers," said David Lereah, chief economist for the Realtors.
Sales of both new and existing homes have set records for five straight years. Analysts are forecasting a slowdown in the sale pace this year as rising mortgage rates cool demand.
Lereah said that with sales slowing, the supply of homes on the market has risen, which will help keep a lid on price increases in the coming year.
"We are entering a period of a more normal balance in supply and demand," he said.
For the final three months of last year, the median sales price for an existing home nationally was $213,000, an increase of 13.6 percent from the fourth quarter of 2004, when it was $187,500. The median is the point where half the homes sold for more and half for less.
The biggest jump in prices in the fourth quarter was in the Phoenix-Mesa-Scottsdale area of Arizona, where existing home prices soared by 48.9 percent to $268,400.
Next was the Cape Coral-Fort Myers area of Florida, where existing home prices jumped by 48 percent in the fourth quarter of last year to a media of $293,100.
Orlando, Fla., was in third place with a price increase of 42 percent to $261,800.
The highest sales price in the fourth quarter was the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $747,000.
At the other end of the scale, the lowest median price in the Realtors survey was in the Danville, Ill., area where the median sales price was $63,800.