Home prices drop nationally, but Raleigh sees slight increase

Posted May 27, 2008

— U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday, a somber indication that the housing slump continues to deepen.

Standard & Poor's/Case-Shiller's said its national home price index fell 14.1 percent in the first quarter compared with a year earlier, the lowest since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.

Its 20-city index tumbled 14.4 percent during the quarter, the lowest since that index was started in 2001.

Nineteen of the 20 metro areas in the survey reported annual declines. Las Vegas had the worst quarterly performance, falling 25.9 percent, followed by Miami and Phoenix.

Only Charlotte reported an increase – 1 percent over the previous year.

Raleigh-Durham is not included in the survey, but according to the Triangle Realtors Association, home prices in the first quarter also increased 1 percent from last year.

In April, however, the average home price dropped by 1 percent from the year before – a sign the area might start to feel downward pressure.

Stacey Horowitz, a realtor with Fonville Morisey, says because of the growing population, the local housing market is still one of the most stable in the country

"It's just a little slower," she said. "It's taking a little longer to sell homes."

According to S&P/ Case-Shiller, Raleigh is expected to stay flat for the rest of the year.

"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.

The metros covered were: Phoenix, Los Angeles, San Diego, San Francisco, Denver, Washington D.C., Miami, Tampa, Atlanta, Chicago, Boston, Detroit, Minneapolis, Charlotte, Las Vegas, New York, Cleveland, Portland, Dallas and Seattle.


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  • jsanders May 27, 2008

    Some reasons are that cities in NC (not all of them, of course) have avoided tacking on too many "planning penalties" on homes:

  • Heel from Hell May 27, 2008

    Also helping is the fact that we still have some job growth in Charlotte and Raleigh. That helps to drive some folks our way and keeps inventories down to a reasonable level.

    A good percentage of the transplants have moved from areas where home prices are, and continue to be, inflated. Surely they are pleased to see how far their equity will go in NC. When you sell your 1,500 sq ft ranch for $400M and move into a 2,500 sq ft home for $275M, it's a positive thing.

    Jobs + Affordable housing is a good thing. Charlotte and Raleigh are in much better positions than most MSA's.

  • foetine May 27, 2008

    I really hate having to go to Charlotte. it's a nasty sprawl that just never seems to end until you discover you're in South Carolina.

  • WRALwontdeletemyaccount May 27, 2008

    This is NOT a surprise... every boom is followed by a bust. The free market is remarkably self-correcting, if the meddlesome politicos can keep their hands out of things!

  • veyor May 27, 2008

    Around April 15th of next year is when the shock will finally hit. The construction industry has lead the way shutting down, which has and will spill over into other industry. A shortfall in tax revenue toward the end of the year will have state agencies scrambling next year, when construction will begin to recover. It takes a long time for things to filter through.

  • Raydianse May 27, 2008

    Way to go Charlotte! You have not limited growth welcomed business allowed new people to move into your area and with that has created a place that business have flourished and are wanting to be and this has helped your citizens. I only hope that other cities will try to model your wonderful example!

  • Gatsby May 27, 2008

    Who believes Raleigh and the triangle are getting by with-out a hit besides Realtors? They will never aknowledge a downturn anyway...bad for business.
    Truth of the matter is that it has been a terrible spring selling season and homes are sitting all over Raleigh.
    Unless you have to try and sell now due to a job or other emergency this is the time to stay put and wait it out a few years. Times like these are when it pays off that you purchased your home because you liked it...not because you wanted a flip for cash.

  • nathanius May 27, 2008

    Houses are really overvalued all across the USA. The cooling of the housing market is not ALL bad.

  • wcnc May 27, 2008

    The sad thing is that some will read this artile and still think that Raleigh is in the same boat. But if you look at the cities listed, most of them also experienced the overinflation of house prices for the last 3-5 years.
    If someone in those markets was "dumb" enough to buy a house with no money down and now finds their house is worth less than they owe, I don't know what should be done for them. That's what happens when you buy more than you can afford.
    To see house prices increase by $10K in a week over several years and NOT think that was going to ever change- and in a big way- is naive.

  • wildervb May 27, 2008

    I would say the main factor for NC riding out this storm is the fact that prices did not jump as high as they did in the over heated markets. Another factor is that our area is still realitively cheap compared to the markets in the North-East where so many people are still relocating from.