House Prices in America – Q4 2006 update

House Prices in America, Updated for the 4th Quarter of 2006
A Global Insight / National City Corporation Joint Venture
March 2007

Global Insight / National City publish a report that looks at house price trends in the US. To produce the survey the organization reviews transactions occurring in the top 317 metro areas in the US ranked by size.

The summary below is a direct quote.

Summary

• House prices continued to climb during the fourth quarter, though at a modest annualized rate of 1.8 percent. This represents an improvement from the third quarter’s 1.6 percent pace and interrupts a 5 quarter sequence of declining appreciation rates.

• Seventy-two of 317 metro areas suffered price declines during the quarter. Cumulatively, these 72 metro areas accounted for 15 percent of all single family units and 22 percent of all single family real estate assets in the nation. Declines were concentrated in California, Florida and the New York metro area.

• Fifty-seven metro areas were judged to be over-valued during the quarter, representing a decline from 60 metro areas (as revised) during the third quarter. More important were declines in the share of all housing units, and real estate assets, judged to be over-valued. In terms of housing units, the percent deemed to be over-valued declined from 17 to 16 percent (as revised). In terms of single family asset value, the percent deemed to be over-valued declined to 28 from 31 percent (as revised). Clearly, we interpret the evidence as reflective of prices reverting to their historic norms.

The full report and a second document explaining the methodology can be found on the Global Insight website. The link will take you to the specific page where you can pick up the two documents (one they email to you and the other can just be downloaded). You can read about what Global Insight does if you go back to their main page after collecting the documents.

Do post comments here so we can discuss the implications.

I have created links to the 3 of the graphics in the report. I posted these yesterday with the title US house prices are up. You can take a look at the graphs there or you can just check the report when it is emailed to you.

Conclusion? So much for a national housing price crash at this stage. Clearly some local issues in some markets.

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