Ellison Chair in International Floriculture
Ellison Chair in International FloricultureTeaching, Research, Extension and Service

Home prices increased in 30 of the 50 states this past year

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From Mark Perry: The map below is from the latest housing report from the Office of Federal Housing Enterprise Oversight, showing the “Four-Quarter Price Change by State” from 2007:Q2 to 2008:Q2.

Notice that the biggest price decreases have taken place in 4 states: CA (-15.8%), NV (-14.1%), FL (-12.4%) and AZ (-9.2%), see previous CD post (data through 2008:Q1 for that post).

Further, house prices have increased over the last year in 30 states, including increases of above 4% for two states (OK and WY), and increases at or above 3% for 12 states (OK, WY, TX, OK, SD, ND, MS, AL, NC, SC, KY, WV). Finally, more than half of the states (27) have experienced home price increases of 1% or greater, and 30/50 states have experienced price increases over the most recent year (2007:Q2 to 2008:Q2).

Location, Location, Location

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This past week I spent time at the Researchers Conference at the SNA (Southern Nursery Association) Trade Show in Atlanta. I talked with a number of growers and retailers and found the conversations similar to those at previously attended conferences — some folks have really struggled this year, some have held even, and others have done “quite well” having both increased their prices and experienced increased sales.

It certainly causes one to reflect on the reasons why this diversity in business experiences have occurred this year. There are several factors, as we have discussed previously within these blog pages. Some are pertinent to the individual firms themselves (e.g. a well-grounded differentiation strategy for instance) and other factors are purely external to the firms strategy (e.g. the effects of a down economy).

I pondered another possible external factor that we have often referred to a “location, location, location” as I read this week’s BusinessWeek. It has an interesting slide show and article about the “Real Estate Boom and Bust in the Same Metro Areas” (article here) which looks at the best and worst-performing zip codes in the 20 largest metro areas. EconomicPicData blog summarizes the BusinessWeek data in the chart below.

For example, in Dallas’ Preston Hollow area (75220 zip code) there has been a +33% increase in asking price over the last year, with a median list price of $310,564 and average marketing time of 125 days. In the Fort Worth area (76110 zip code) of the Dallas metro area, asking price has decreased by -19%, with a median list price of $104,538 and average 118 days on the market.

The bottom line — There is no “national real estate market,” it’s thousands and thousands of local real estate markets. As these data show, there’s not even a single “local real estate market” by metro area, it all comes down to zip code areas. Since there are about 43,000 zip codes in the U.S., that ‘s probably an approximation of the minimum number of local real estate markets, and many local markets probably vary within a zip code. So where you live and operate your business certainly affects business performance.