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March 14, 2008
Building Storm Update II
The first phase of anxiety over a credit squeeze was brought on by the suspension of two Bear Stearns Hedge Funds over the summer. Now it seems Bear Stearns itself is on the verge of collapse.
Perhaps now is good to time to revisit the underlying driver of all this havoc, falling housing prices.
Earlier in the week I provided an update on Pennsylvania housing prices. The Office of Federal Housing Enterprise Oversight (OFHEO) has also released new data on housing prices by metropolitan area in the 4th quarter of 2007 which I summarize below.
From the 4th quarter of 2006 to the 4th quarter of 2007 inflation-adjusted housing prices fell slightly in the Philadelphia and Allentown Metropolitan areas. There was however healthy growth in prices in Scranton (4.3%), Altoona (3.6%), and State College (3.5%).
(see larger figure)
As reported in Building Storm from 2001 to 2006 inflation-adjusted housing prices grew the most in Philadelphia (52%), Allentown (49%), York (38%) and Reading (37%).
(see larger figure)
Not surprisingly housing prices grew the least (or declined) in each of these same metropolitan areas in the most recent year. Of the metro's with the most growth in prices between 2001 and 2006, appreciation held up the best in the York-Hanover metropolitan area where prices grew by 1.9% in the most recent year. However that is still well below the housing price growth from 2001 to 2006 in York-Hanover where inflation-adjusted prices grew on average by 7.6% a year. Hard to believe that the recent growth in Scranton, Altoona and State College will hold up in the next couple of quarters.
--Mark Price
Posted by Price at March 14, 2008 02:40 PM