NAR: Most metropolitan-area home prices rising

Median existing-home prices are in-creasing at healthy rates in most metropolitan areas and typically are increasing well above historic norms, according to the latest quarterly survey by National Association of Realtors.

The association's fourth-quarter metro area home price report, covering changes in 120 metropolitan statistical areas, shows 29 areas with double-digit annual increases in median existing-home prices and only 11 areas posting generally mod-est price declines, according to an NAR press release.

The national median existing-home price was $148,000 during the fourth quarter, an increase of 6.2 percent compared to the fourth quarter of 2000 when the median price was $139,300.

The median is the midpoint, which is a typical market price where half of the units sold for more and half sold for less.

Home prices typically rise one to two percentage points faster than inflation, which actually contracted at a 0.4 percent annualized rate in the fourth quarter.

NAR Chief Economist David Lereah said the report reflects a shortage of homes available for sale in many areas.

"The inventory of homes available for sale during the fourth quarter was fairly low, averaging a 4.5-month supply we need about six months worth of inventory to have a more balanced market," he said. "The short supply is continuing to put pressure on home prices in many areas, with more buyers than sellers of the more desirable properties."

NAR President Martin Edwards Jr. said that while appreciation is generally strong, home prices are not running away from incomes in most areas.

"Although home prices have been increasing at somewhat higher rates, the good news is the combination of prices, income and mortgage interest rates are the most favorable we've seen since 1973," Edwards said. "We expect the typical home price to rise at a little slower pace this year up about 4.5 percent."

The strongest price increase was in Nassau-Suffolk, N.Y., where the fourth quarter price of $269,900 rose 23.2 percent from a year earlier. Next came Min-neapolis-St. Paul at $172,800, up 22.3 percent from the fourth quarter of 2000. Third was Monmouth-Ocean, N.J., with a fourth-quarter median price of $214,300, up 21.3 percent in the last year.

Median fourth-quarter metro area resale prices ranged from $81,500 in Waterloo-Cedar Falls, Iowa, to nearly six times that amount in the San Francisco Bay area, where the median price was $463,900.

The second most expensive area in the United States was Anaheim-Santa Ana (Orange County, Calif.) at $360,900, followed by Boston at $350,400.

Regionally, the strongest increase was in the South where the median existing-home price of $139,500 rose 7.6 percent from the fourth quarter of 2000. The strongest increase in the South was in the Washington, D.C., area, where the median price of $223,900 was 19.9 percent higher than a year earlier.

In Ft. Meyers-Cape Coral, Fla., the fourth-quarter median price of $120,000 was up 17 percent in the last year, while Oklahoma City, at $101,900, also rose 17 percent.

Six other southern metro areas experienced double-digit increases in their median price.

The median resale price in the North-east during the fourth quarter was $150,100, rising 6.9 percent from a year earlier.

After Nassau-Suffolk, N.Y., and Mon-mouth-Ocean, N.J., the strongest in-crease in the region was in Providence, where the typical resale price was $165,400, up 14.8 percent from a year ago, followed by Bergen-Passaic, N.J., with a median price of $296,400, which was 13.5 percent higher than the fourth quarter of 2000.

Five other northeastern metros had double-digit price gains.

In the Midwest, the fourth-quarter median existing-home price of $125,900 was 5.4 percent higher than the same period in 2000.

After Minneapolis-St. Paul, the strong-est increase in the Midwest was in South Bend-Mishawaka, Ind., where the median price of $92,500 was 15.9 percent higher than the fourth quarter of 2000.

Next came Wichita, Kan., at $98,000 in the fourth quarter, up 11.9 percent in the last year.

The median resale price in the West was $194,300 during the fourth quarter, up 4.3 percent from a year ago. The highest increase in the region was in Sac-ramento, where the fourth-quarter median price of $178,400 rose 18.1 percent from a year earlier.

This was followed by the Los Angeles area, at $254,300, up 12.6 percent from the fourth quarter of 2000, and Colorado Springs, where the median price of $173,300 increased 12 percent; An-aheim-Santa Ana rose 11.6 percent.