California, Florida Are Still Way Out of Whack

After months and months of hearing about double-digit price drops, record foreclosures, and stagnant home sales, O.C. residents might be surprised to know that there are places in the U.S. where home prices are actually appreciating.

This report from the Office of Federal Housing Enterprise Oversight notes that housing-market extremes are most pronounced in California and Florida, but almost everywhere else, price drops are far more modest.

U.S. home prices fell in the second quarter of 2008, according to OFHEO’s seasonally-adjusted purchase-only house price index.

The index, which is based on data from home sales, was 1.4 percent lower on a seasonally-adjusted basis in the second quarter than in the first quarter. This decline was less steep than the 1.7 percent decline in the prior quarter.

Over the past year, prices fell 4.8 percent between the second quarter of 2007 and the second quarter of 2008. The decline is the largest in the purchase-only index’s 17-year history, but is much smaller than those of other indexes.

Translation:  U.S. home prices are still dropping, but more slowly than in previous quarters.

Of the 20 ranked cities with the greatest price declines over the last four quarters, all but one (Las Vegas-Paradise, Nevada) were in California or Florida.

Orange County’s price decline of 15.32% wasn’t the worst in the country. That honor belongs to Merced (down 34.5%), followed by Stockton (-31.7%) and Modesto (-28.5%).

Where can you go to find a house that might do what we were led to believe houses always do — appreciate steadily every year?  Here are the hot locales.

Market Area /Yearly Appreciation

Houma-Bayou Cane-Thibodaux, LA:  9.06
Decatur, AL:  6.44
Charleston, WV:  5.99
Greenville-Mouldin-Easley, SC:  5.78
Idaho Falls, ID:  5.27
Grand Junction, CO:  5.25
Charlotte-Gastonia-Concord, NC-SC:  5.24
Austin-Round Rock, TX:  4.98
Fayetteville, NC:  4.97
Tulsa, OK:  4.87

Recent Redfin posts:
The Costa Mesa Market Report:  Detached Home Stats, August 2008
“Truth and Roses Have Thorns About Them”
Orange: Condos Under $200K