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Economy in Brief

United States' Home Price Performance All Over The Map
by Tom Moeller December 21, 2009

Recent signs of stability in home sales and construction hold promise that deflation in home prices is abating. Of course, that depends on whether the only reason for pricing improvement is due to the increased affordability of housing created by past price declines. Positive growth in jobs and income would support a more lasting bottom in pricing power ... then growth in housing sector activity. States' home price data in the table below is arranged by highest-to-lowest y/y change during all of last year. The difference between the state with the best performance (Texas) and the worst performance (Nevada) is a huge twenty percentage points. Versus 2007, the rate of price change slowed throughout the country, but nowhere was it more pronounced than in California; to a 17.2% rate of decline from negative 4.7%.

Through the third quarter of this year, home price declines occurred in all but a few states. For the country as a whole home prices fell another 4.1% y/y during 3Q after the 2.7% decline during 2008. So far this year, however, the rate of price decline has stabilized. The good news was that the rate of price deflation both in Florida and California slowed versus 2008. In fact, the rate of home price decline halved in California. Alabama, North Carolina and Indiana are three states where earlier stability in home prices gave way to deflation. Past stability was, however, tenuous as price appreciation already had slowed appreciably. In Texas, Nebraska and Louisiana home price gains all but disappeared.

Where home prices go from here clearly is a hard call. And as individual states' recent performance indicates, much of the story may be local. Is there a heavy concentration of certain industries in the state such as finance or defense, or were a state's home prices inordinately influenced by speculative forces. Home Prices: A Case for Cautious Optimism from the Federal Reserve Bank of St. Louis is available here.

The latest report from the Federal Housing Finance Agency can be found here.

The states' home price figures can be found in Haver's REGIONAL database.

Median Price of Single-family Homes  (y/y % Chg.) 3Q '09 2008 2007 2006 2005
  Texas 0.5 3.2 5.7 5.9 4.4
  Alabama  -1.1 2.5 5.1 8.1 7.2
  North Carolina -2.1 2.2 6.0 7.7 6.5
  Tennessee -1.1 1.7 5.2 7.4 6.6
  Louisiana 0.4 1.6 5.5 11.2 7.0
  Colorado -1.7 0.8 2.0 3.2 5.0
  Indiana -1.3 0.7 1.9 1.9 3.9
  Arkansas -0.8 0.6 3.7 6.5 7.4
  Nebraska 0.7 0.4 1.7 2.3 4.6
  Missouri -1.8 -0.1 2.5 4.3 6.7
  Wisconsin -1.9 -0.3 1.8 3.8 7.9
  Maine -3.2 -0.4 2.0 4.8 11.3
  Washington -8.3 -1.3 7.5 15.7 15.8
  New York -4.0 -1.8 1.4 7.3 13.1
U.S. Total -4.1 -2.7 1.9 7.3 11.4
  Connecticut -4.8 -3.0 0.9 5.9 12.3
  Virginia -4.2 -3.2 2.3 10.8 19.1
  Hawaii -8.2 -3.8 2.5 14.4 24.1
  Massachusetts -3.4 -3.9 -2.7 1.0 9.4
  New Jersey -6.0 -4.1 0.6 9.1 15.7
  District of Columbia -3.9 -4.8 3.1 12.1 23.0
  Michigan -5.9 -5.3 -3.1 -1.0 3.6
  Maryland -7.4 -5.8 2.3 13.2 21.3
  Rhode Island -6.8 -6.6 -2.0 4.5 13.6
  Arizona -13.6 -11.9 -0.2 19.0 29.2
  Florida -12.4 -14.6 -1.5 16.5 25.4
  California -8.4 -17.2 -4.7 10.2 22.8
  Nevada -16.7 -17.8 -3.5 9.0 23.5
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