House prices rose an average of nearly 10 percent in the first quarter, according to a government survey covering the country's largest metropolitan areas.
An anomaly? Absolutely. The average was skewed higher by some absurd numbers in several markets. There's no way the selling price of new and used homes jumped almost 60 percent in Detroit, or nearly 50 percent in Miami, in just one year!
At the same time, the figures reported for the first quarter as part of the monthly interest rate survey published by the Federal Housing Finance Agency shouldn't be dismissed out-of-hand. They are a signal that the housing market finally may be waking up.
Of course, a single three-month period does not make for a trend. But the fact that prices were higher in 23 of the 32 areas covered in the report -- 13 of them by double digits -- shows that buyers are starting to take advantage of record low loan rates.
That the survey registered such strong gains also indicates that houses in the upper price brackets are starting to move again in many places, in many cases at a faster clip than those in the lower ranges.
Those are repeat buyers, homeowners who must sell their current residences before they can move up the ladder. They are the key to a smoothly running housing market: As they buy new homes, they sell their old homes, which means folks below them on the affordability scale can start buying, too.
Take that all the way down to the ladder's first rung, and it is a signal that first-time buyers, the rookies who have never owned before, are finding some wonderful opportunities that haven't presented themselves in ages.
Maybe sellers are finally getting real about the values of their homes. Maybe the inventory of places for sale has been winnowed down so much that buyers are fighting over the few good houses still left on the market. Or possibly both buyers and sellers are sensing a bottom and are pulling their respective triggers.
The important take-away from this or any other indicator of housing prices is not to be fooled by rip-and-read headlines and news reports that mention only national or regional price trends. Those kinds of reports can do you in.
Whether you are a buyer or seller, you need to find out what's going on in your region, your town, your community, maybe even your block.
You want to know the average number of days houses are on the market before they sell, which will tell you the velocity of your particular market. If houses are moving faster than normal, buyers might want to jump in more quickly.
You'll also want to know how many houses are for sale in your price range. If it is more than usual, there are probably still bargains to be had. But if the unsold inventory is low, the best deals -- and the best houses -- are probably already gone, and prices will start moving up, if they haven't already. Even for the dogs.
To get an idea which way the market is trending in your neck of the woods, you can start right here with the latest FHFA figures. They show that the average selling price of both new and used homes rose 9.7 percent in the first quarter of 2012.
Drilling down, the survey found that prices were up in 23 of the largest metropolitan statistical areas and down in nine. But again, things may be different in your submarket, so find a real estate professional who can read the key housing tea leaves to paint a more exact picture. In the meantime, look at the FHFA's survey, which is more market-specific than just about any other index published for general consumption. Others delve deeper, but they are too detailed for national news outlets and often too tough to find for local reporters.
Of the nine markets that registered falling prices, three of those declines were double-digit. But drops such as nearly 17 percent in Pittsburgh, almost 16 percent in Cincinnati and 10 percent in Cleveland could be aberrations, too.
Most likely, the survey is showing a price correction from previous periods when there were an unusually high number of sales in the higher price ranges. Now, prices are falling back to normal. These are generally the less expensive of the big metro areas, so it's also possible there were an inordinate number of lower-price deals in the January-March period.
Likewise, such ungodly price gains of 59 percent in Detroit, 50 percent in Miami, 46 percent in Chicago, 41 percent in Kansas City and 32 percent in Orlando also have to be taken with a grain of sawdust. Year-over-year gains like those didn't even occur at the height of the housing boom.
As usual, San Francisco is the nation's most expensive city for housing. The average in the Bay Area was $636,000 in the first quarter, an increase of 9.2 percent from $582,300 in the same period last year.
California's two other big markets -- San Diego and Los Angeles – rank second and third on the Top 10 list. In San Diego, the average rose 3.7 percent, from $506,400 to $525,100, while in LA, it was up 6.4 percent, from $481,000 to $511,900.
In something of a surprise, Seattle now ranks as the nation's fourth most expensive housing market at $473,000, a gain of 18.1 percent from $400,500 a year ago.
Washington rounds out the top five at $445,800, a decline of 3.9 percent from $464,000.
No. 6 Boston and No. 7 New York also reported declines. In Beantown, the dip was a slight 0.8 percent, from $438,700 to $435,300. But in the Big Apple, the drop was a more significant 9.8 percent, from $475,900 to $429,300.
Miami is the only other market above the $400,000 benchmark, but that's only because the average there rocketed 49.8 percent, from $279,600 to $418,800.
Rounding out the Top 10 are Denver and Virginia Beach. The average in the Mile High City is $385,400, a 19 percent jump from $323,800 12 months ago, while the average in the sea-level Virginia town rose 7.1 percent, from $348,600 to $373,300.
The cheapest big-city market? Right now, it's Pittsburgh, where the average dropped 16.9 percent, from $227,700 a year ago to $189,200 in this year's first quarter.
AVERAGE SALES PRICES: First Quarter
(New and Used Homes in Thousands of Dollars)
City 2011 2012 Percentage Change
Atlanta GA $304.3 $325.9 7.1
Boston-Worcester MA 438.7 435.3 (-0.8)
Chicago IL-Gary IN 201.2 293.8 46.0
Cincinnati OH 289.7 244.3 (-15.7)
Cleveland-Akron OH 225.5 203.2 (-10.0)
Columbus OH 215.4 262.4 21.8
Dallas-Fort Worth TX 302.6 330.2 9.1
Denver-Boulder CO 323.8 385.4 19.0
Detroit-Ann Arbor MI 168.3 267.9 59.2 Houston-Galveston TX 297.6 367.7 23.6
Indianapolis IN 231.5 260.9 12.7
Kansas City MO-KS 224.8 317.1 41.1
Las Vegas NV 219.2 221.1 0.9
Los Angeles-Riverside CA 481.0 511.9 6.4
Miami-Fort Lauderdale FL 279.6 418.8 49.8
Milwaukee-Racine WI 230.7 300.8 30.4
Minneapolis-St. Paul MN 273.3 247.1 (-9.6)
New York-Long Island NY 475.9 429.3 (-9.8)
Orlando FL 214.4 283.6 32.3
Philadelphia PA-Wilmington DE 306.3 351.1 14.6
Phoenix-Mesa AZ 254.4 285.6 12.3
Pittsburgh PA 227.7 189.2 (-16.9)
Portland-Salem OR 345.1 366.2 6.1
Sacramento CA 297.2 325.7 9.6
San Antonio TX 208.0 201.1 (-3.3)
San Diego CA 506.4 525.1 3.7
San Francisco-Oakland-San Jose CA 582.3 636.0 9.2
Seattle-Tacoma WA 400.5 473.0 18.1
St. Louis MO-IL 253.3 275.7 8.8
Tampa-St. Petersburg FL 250.6 244.3 (-2.5)
Virginia Beach-Norfolk VA 348.6 373.3 7.1
Washington DC-Baltimore MD 464.0 445.8 (-3.9)
U.S. Average (32 Cities) $307.6 $337.5 9.7
Source: Federal Housing Finance Agency