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How Home Prices Fared in 20 Markets in 2007

Sheree Curry

"Wherever you look things look bleak," says Robert J. Shiller, chief economist at MacroMarkets LLC, which recently sold its rights in the indices.

Of the top 20 markets tracked by the index, 17 of the metro areas reported annual price declines and the remaining three reporting flat or moderate growth rates. Also 14 of the metro areas are reported record lows and eight are in double-digit decline.

Here's a look at these markets:

Atlanta

Prices fell 3.4% year over year in Atlanta. Some listings expire or are withdrawn because sellers are not getting offers, but new home builders don't have the luxury to unlist homes. "Builders have an inventory overhang because we can't take our homes off the market," says Stephen Baldwin, chief financial officer for Bowen Family Homes and president of Greater Atlanta Home Builders Association.

The number of new homes on the market has dropped about 20%, but the sales rates have declined causing a nearly 11-month supply on the market, he says. "Builders will sell for substandard or no margins at this point. You have to overcorrect to get buyers to commit."

Boston

The median home price for Bean Town only dropped 1.9% in the fourth quarter to $380,700 from $388,000 a year prior. "We are beginning to see the first signs of a recovery in Boston," says Chris Remmes of Keller Williams Realty. "In 2007 both average and median prices were up 11.2% and 4.4% respectively in the Downtown condo market (Back Bay, Beacon Hill and the South End). Other neighborhoods in the city have seen prices stabilize. Inventory is down in most sections of the city and by as much as 45% in Charlestown."

Charlotte

Charlotte, Portland and Seattle are the only three MSAs still experiencing positive annual growth rates. In Charlotte, there were 27,228 homes listed for sale with the Multiple Listing Service as of the first week in February, according to the Carolina Multiple Listing Service. The average price for the last two quarters has been between $270,000 to $285,000, and is expected to rise for the first quarter of 2008, says real estate agent Chip Fisher of Re/Max Platinum. "New construction has diminished slightly due to foreclosures and the average days on market was 76 in the last quarter of 2007 and expected to rise just slightly in the first quarter of 2008."

Chicago

The Chicago metro area had a modest median price decline of $261,000 in the fourth quarter from $268,100 a year prior. "Builders continue to move inventory by offering buyers aggressive price concessions or generous upgrades," says Jim Merrion of RE/MAX Northern Illinois. He says the residential market is stronger in the city of Chicago than in the low to midpriced suburbs. "Upscale suburban areas continue to do well."

Cleveland

Prices fell 6.3% in Cleveland. "We had a god spurt here this summer and we had 12 showings in December on our model," says homebuilder and real estate John Gazzo of Gazzo Realty. "We have homes under construction in the mid-500s and I don't feel we have the same problem as those who are in the low 300s and low 200s."

Dallas

Dallas only had a modest price decline of 2.4%. "Existing homes in Dallas have held their pricing fairly well relative to other markets," says Todd Tramonte, with Assist 2 Sell Buyers & Sellers Realty. "We are experiencing no major losses, but very little in the way of appreciation as well."

Denver

Homes prices fell 4.5% in the Denver metro area. The median price per square foot for homes in the Mile High City is about $132 or $218,330 for a typical median home. How homes sell in Denver depends on the neighborhood, says Kit Eschner, and Perry & Co. "Some neighborhoods are appreciating and some have depreciated more than average."

Detroit

Loss of jobs and a significant number of homes in foreclosure led to Detroit's 13.6% decline in home prices.

Las Vegas

Las Vegas and Phoenix are tied for second as the weakest markets with a 15.3% each in home price declines. Nevada continues to have the highest foreclosure rate in the nation, according to RealtyTrac.

Los Angeles

Home prices fell 13.7% in Los Angeles. The median price of entry-level homes in Los Angeles County is $433,200, with a typical monthly payment of $2,890, according to the California Association of Realtors. One would need a household income of about $86,700 to purchase here, even despite the drop in home values.

Miami

Miami remains the weakest market, reporting a double-digit annual decline of 17.5%. "Miami-Dade is currently going through the worst condominium bust cycle that Florida has seen since 1975," says economist Hank Fishkind of Fishkind & Associates.

Minneapolis

The median sales price here dropped 4.9% to $217,200 from $228,300 and homes sit on the market for an average 165 days, up about 18 days from last January. The number of signed purchase agreements (pending sales) declined from last year by 17.8% for the same time period comparison, even though the total number of homes for sale is up 12%, according to the Minneapolis Area Association of Realtors.

New York

Although home prices fell only 1.3% from November to December, overall prices in New York fell 5.6% year to year. The average sales price in Manhattan is $1.9 million. A 1,200 square foot, 2-bedroom unit in the historic Silk Building is listed at $1,699,000.

Phoenix

Las Vegas and Phoenix are tied for second as the weakest markets with a 15.3% each in home price declines. "The entry level market is opening up, with prices where they were five and six years ago," says RE/MAX agent Nate Martinez.

Portland

Portland is only one of three MSAs still experiencing positive annual growth rates. Portland has been holding strong with median home prices increasing month after month. Fourth quarter 2007 saw a 1.8% increase to $290,500 from $285,400 a year prior. "We have a positive economic atmosphere in our area. The current median sold price is up, due to a greater ratio of sales on the higher end," says Jim Homolka, President of RE/MAX Equity Group, Inc.

San Diego

Home prices fell 15% in San Diego between December 2006 and December 2007. Only 31% of San Diego households can afford to buy a home here.

San Francisco

In December, San Francisco slipped into negative double-digit territory with an annual return of -10.8%. Only 20% of San Francisco residents can afford to buy a home here, according to the California Association of Realtors. In neighboring Oakland, real estate agent Tara-Nicholle Nelson says a fair number of homes are priced under $300,000. "We're still seeing a good number of sales as bargain hunters find many more options than they ever had at that price point before [but] the $700,000 to $1 million market sector is hurting."

Seattle

Seattle is one of three MSAs that are still experiencing positive annual growth rates, but Seattle is just barely hanging on with a 0.5% price increase. "It is a slower market, but a sustaining market," says Re/Max Connected agent Eileen Tefft. "I had a multiple offer situation two weeks ago for a severely underpriced home. We drop prices here 3% to 5% if the homes haven't sold within 3 to 4 weeks. When the market is good we reduce prices after one week. This [slow down] is something that should bounce back any day now."

Tampa

Tampa home prices slipped 13.3%. "In the Tampa market Luxury Home sales have remained steady," says Daniel Westbrook of Re/Max First in Real Estate. "I have more traffic on my luxury homes, than I do my listings that are in a lesser price range."

Washington, D.C.

Home prices in the State Capitol fell 9.4%. In nearby Prince William County, Va., homes are sitting for 120 days without offers, says Assist2Sell Broker Susan Jacobs. The price on one of her listings in Bristow, VA has dropped to $284,990, just $10,000 more than nearby foreclosures. "Sellers who want or need to sell are forced to drop their price to or below most foreclosures to result in an offer," she says.

Click here to see prices and photographs of selected homes in these markets.