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OFHEO Metropolitan Area House Price Index for the First Quarter
1 Jun 06
The OFHEO repeat sales index for the first quarter of 2006 shows moderating home price appreciation across the country, but home price appreciation nonetheless- no bubble has been burst yet.
The repeat sales index of OFHEO is, we believe, the best available local area existing home price indicator. The headline number for the United States in today's release was that year-over-year price gains were 12.5%, down slightly from 13.3% gains for 2005. More significant at this time, however, as we look for a market turning point is the quarterly appreciation for 2006q1 over 2005q4. The annualized 8.1% gains in first quarter, though still robust, marked the first quarter of single-digit gains in two years. Those numbers are U.S. averages. The much-discussed home price bubble is of course not a nationwide phenomenon. Among the hot markets, there were very few actual quarter-over-quarter declines, and none approaching the double digit of more magnitude that would be indicative of a bubble bursting. San Jose (-0.20), Santa Barbara (-1.3), and Cambridge (-0.2) were the notable ones. Meanwhile, at least some appreciation continued in nearby San Francisco (+1.2), San Diego (+0.2), Los Angeles (+4.1), Santa Ana (+3.0), and Boston (+0.5). In the Northeast, gains from New York to Washington were near double-digit annualized rates, and nearly 20% in many Florida metros. 
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