Breakdown of U.S. housing prices shows gains almost everywhere
The latest numbers from the field are in, and the news is good. Housing prices were up almost everywhere across the country in 2012.
Of the 134 core-based statistical areas (CBSAs) that reported 500 or more sales last year, 123 saw gains, according to year-over-year data collected as of Dec. 31 by Pro Teck Valuation Services of Waltham, Mass. CBSAs are defined as “micropolitan” areas of at least 10,000 people who are tied to an urban center by commuting.
Some increases were exceptional, such as the nearly 35% jump in the price per square foot in the Phoenix CBSA and 25% each in San Jose and Fort Myers, Fla. Others were minuscule, such as the 0.23% increase in Salem, Ore., or the 0.26% gain in Nassau County, N.Y.
But even those slight increases are welcome, and far better than the 10% drop in square-foot prices recorded in South Bend, Ind., which had the biggest decline among the 11 markets where prices are still falling.
Overall, the national median price per square foot rose from $81.08 in 2011 to $86.42 last year, according to Pro Teck, which takes its numbers at least daily from about 850 multiple listing services.
Since all real estate is local, the national median is useful only as headline material. What’s more important is judging whether the real estate market is rising or falling in your area — and not just your city or town, but your community, your neighborhood and sometimes even your block. Breaking down housing prices by CBSA is a step in the right direction.
Moreover, Pro Teck’s median price per square foot is more helpful than other measures in gauging the path of housing prices. Most of the more popular indexes are influenced by product mix and the number of sales in a particular price range. Consequently, an unusually large number of sales of more expensive houses can result in misleading readings, sending the average or median price higher than it otherwise would be. The same phenomenon can occur when most sales are in the lower price brackets, pushing the announced figure lower.
But the median price per square foot tends to even things out. By normalizing for swings in the type and price of houses sold, it represents a truer picture of the market. In that sense, then, price per square foot — let’s call it PPSF — is the great equalizer by which all houses can be judged and compared with one another.
It also is worth mentioning that Pro Teck’s figures are more current. Whereas other indexes you might read or hear about are 3 and perhaps up to 6 months old, the numbers supplied by the Massachusetts valuation company in its latest report are as of year-end 2012. You can’t get much more current than that.
With that said, let’s take a look at what’s happening throughout the country:
In 39 CBSAs, the PPSF rose by double digits in 2012, with Phoenix, San Jose and Fort Myers leading the way. Interestingly, those markets were three of the hardest-hit in the country during the downturn. But now they seem to be thriving.
So does Atlanta, another spot that took it on the chin from the recession. The PPSF there was up 19.35% last year.
The measure was up 18.85% in Bend, Ore., 18.67% in Tucson and 18.14% in Santa Rosa, Calif., and Flint, Mich.
On a PPSF basis, San Francisco is far and away the nation’s most expensive housing CBSA. Expect to pay $492 and change per square foot in the Bay Area. That’s a 16.1% jump from year-end 2011. By comparison, the current PPSF in San Jose is $454, and in Honolulu it is $409.
Nowhere else do housing costs come even close to those cities. The next most expensive place is the Santa Ana-Anaheim CBSA, where the PPSF is $281.
Las Vegas is another strongly improving market. The PPSF there was $77, a year-over-year increase of 15.6% and a relative bargain compared with the West Coast. The Riverside CBSA, at a PPSF of $114, is less expensive than, say, the San Diego CBSA, where the PPSF ended 2012 at $219.
In the nation’s capital, the PPSF is $141, a jump of nearly 9% from a year earlier. Surprisingly, the cost is the same in the Baltimore CBSA, which has always been considered a cheaper, albeit somewhat distant alternative, at least by East Coast standards.
The PPSF is relatively equal in Dallas and Houston too. In Dallas, it’s $81; in Houston, $75. Both are up about 7.5% from a year earlier.
In New York, the PPSF is nearly $239, a jump of nearly 7% from year-end 2011. But in Chicago, it is only $96, a gain of about 3.5%.
The least expensive of the most active CBSAs? That would be Flint, where the median price per square foot of living space is an affordable $51 — an 18% jump from Dec. 31, 2011.
As an alternative, consider South Bend, where the PPSF is just under $53 and falling.
Distributed by Universal Uclick for United Feature Syndicate.
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