Home prices in two out of every three of the nation's top 119 housing markets held their own or rose during 1982--despite the worst financing conditions in 40 years and widespread expectations of declines in real values.
That is the provocative conclusion of a forthcoming statistical analysis of bellwether housing markets from coast to coast, compiled from sales data during the past 12 months. The appraisal study--known as the "Home Price Comparison Index"--documents relative housing costs that corporate employes face when they move from one market to another.
Used by large employers, real-estate firms and investors, the index focuses on selling prices of homes with 2,000 square feet, three bedrooms, two baths and a garage in "mid-level-executive" neighborhoods within each metropolitan area. Generally the neighborhoods are located in suburbs rather than the central city, the houses sit on average-sized lots, and the financing arrangements are typical of what a relocating employe would encounter during the latter months of 1982.
The data for the study are compiled twice a year from actual sales transactions by a Sears, Roebuck subsidiary, Nationwide Relocation Service.
Although a substantial minority of markets around the country experienced net price declines--such as metropolitan Los Angeles, where speculation had sent values soaring two years ago--most markets came through 1982 "flat or better," in the words of Nationwide Relocation Executive Vice President David Garretson, coordinator of the study.
The sharp improvements in financing conditions during the final months "unquestionably helped pull up sales prices," Garretson observed, and the same upward trend is underway in 1983.
The signs in many neighborhoods monitored by the relocation firm, in fact, "are very definitely for rising prices this year"--perhaps much larger jumps than realty experts and economists are anticipating, he added.
Here's a sample of the comparison index's findings for the end of 1982:
* The same three-bedroom house you could buy this weekend in Norfolk, Va., for $70,000 would cost you three times as much ($225,000) in Menlo Park, Calif., 3,000 miles away. The house in Norfolk, however, would have appreciated in resale value by 6 percent during the course of last year, while the Menlo Park unit would have dropped in value by 10 percent.
* Moderate-priced housing in metropolitan areas with solid local economies turned in some of the best gains in resale values for the year. The test neighborhoods of San Antonio, for example, showed an average price gain of 13 percent (up from $70,000 at the start of 1982, to $79,000 in December). Colorado Springs was up 7 percent (from $70,000 to $75,000), Jacksonville by 7 percent (to $80,000) and Fort Worth climbed by 6 percent to $92,500.
* Values in a number of the large Midwestern and Northeastern metropolitan areas held up surprisingly well last year, given the tough economic situations they faced. Cincinnati, for example, was up 1 percent to $80,000 in the target neighborhoods surveyed. Columbus, Ohio, registered a 4 percent gain (to $89,000); Kansas City (Kansas and Missouri) was up by 3 percent to $77,500; suburban Chicago rose by 3 percent (to $82,000); Hartford was up by 1 percent (to $87,000); and suburban Boston hit $95,000, up 6 percent over the index of late 1981.
* Not all big industrial cities fared as well. Hard-hit Detroit, to no one's shock, turned in its second consecutive year of declines--down 5 percent to $81,500. Fort Wayne test prices dropped by 6 percent to $64,000, and Akron's prices fell by 9 percent, to $58,000. Akron now ranks as the lowest-priced major housing market in the country, displacing Buffalo, which held its own in 1982 at $65,000. (Looked at in a more favorable light, Akron can now boast that it gives those relocating more house for their dollar than any other big city in America.)
* Many high-priced markets tended to stay flat or gain relatively little last year, according to the index. Suburban Washington, D.C., for example, sat at $135,000 for the year (test neighborhoods were in Reston, Springfield, and Vienna, as well as Gaithersburg, Rockville and selected areas of Prince George's County). Swanky Stamford, Conn., remained at $150,000, and San Francisco held at $225,000. A number of Sunbelt and Western cities continued to move steadily into the higher-cost brackets, nonetheless: Austin, Tex., for instance, was up 10 percent to $110,000. Suburban Denver test prices rose by 5 percent to $100,000; Houston was up 5 percent to $110,000, and Dallas hit $140,000.
* The eight most expensive markets for executive employes relocating were all in California. Three are in the Los Angeles area, ranging from $200,000 to $325,000, and several are clustered near San Francisco (Oakland, $210,000; San Rafael, $202,500). Honolulu--once among the fastest-rising, speculative-price gainers in the country--dropped for the second year in a row, down 10 percent to $199,000. Connecticut's southern Fairfield County jumped into the upper ranks as the highest cost market outside California, with a $190,000 average price tag, ninth highest in the country.
(For free summary copies of the new Home Comparison Price Index when it's published in mid-February, call Nationwide Relocation at 800--323-4850.