House Prices

As Calculated Risk notes this morning, the quarterly estimate of housing price appreciation by the OFHEO was just released for the April-June period of 2005.

As usual, my preferred way of looking at this data is at the level of local (i.e. metropolitan area) markets. The following two charts present a sampling of house prices in some major metropolitan markets in recent years, including today’s most recent data.

The first chart shows prices in markets that have been appreciating rapidly for quite some time. The rapid price appreciation of the past few years in those markets showed little or no signs of abating this spring.

The next chart shows a small selection of the many metropolitan markets that did not experience such enormous price increases during the first part of this decade. However, many of those markets that missed out on the first part of the house price boom now seem to be joining the bandwagon. One after another, markets outside of California and the Northeast are now also beginning to experience rapid house price appreciation.

One interesting question that this raises is the following: when the appreciation does indeed finally come to an end in the big markets of California and the Northeast, will the lagging markets in the rest of the country keep appreciating?