One hundred fifty-seven of 317 metro areas suffered price declines during the last quarter. Cumulatively, these 157 metro areas accounted for 38 percent of all single-family units and half of all single-family real estate assets in the nation. Declines were widely dispersed, though most highly concentrated in California, Florida, New York, New England, and the industrial Midwest.Nationally, however, house prices advanced during the first quarter at an annualized rate of just 2.2%. This latest gain falls between the third quarter pace of 2.0 percent and the fourth quarter pace of 2.5%. On a year-over-year basis, prices are up 3.0 percent, the weakest gain in a decade.
Fifty-four metro areas were judged to be overvalued during the quarter, representing a decline from 62 metro areas (as revised) during the third quarter More important were declines in the share of all housing units, and real estate assets, judged to be overvalued. In terms of housing units, the percent deemed to be overvalued declined from 17 to 14 percent (as revised). In terms of single-family asset value, the percent deemed to be overvalued declined from 33 to 25 percent (as revised). Clearly, we interpret the evidence as reflective of prices reverting to their historic norms, though further adjustment is likely.