The HPI Cometh

The Office of Federal Housing Enterprise Oversight (OFHEO) is out with the latest edition of its Housing Price Index (HPI). For those of us in the Augusta area, there's good news and there's not-so-good news. (For those of you who aren't mortgage/real estate geeks like me, the HPI is a quarterly measurement of average home prices for more than 280 metro areas across the U.S.)

The not-so-good news is that after ranking #2 in the country for 1-year home price appreciation in the 3rd-quarter HPI numbers, we've slipped to 97th for 4Q 2008. Our year-over-year home price appreciation was -0.14% from 2007-2008. In other words, essentially flat.

The good news is that:
1) We still rank in the top one-third of OFHEO's list of metro areas
2) Area home prices held steady during the worst quarter of home price declines in the HPI's 18-year history.
3) On average, Augusta-area homes are worth almost exactly what they were worth a year ago.

That last point should be of particular comfort to anyone who can't stop hearing about how home prices nationally are dropping like an untethered stone. I've said it before and I'll say it again: When you hear about the "average price of an American home" in the media, the key word is "average." Of the 25 markets with the worst home price declines in the country over the past year, 24 are in either California or Florida (Las Vegas is the other). That's bad for folks living in those places, but it doesn't directly affect us in Augusta.

The bottom line is that during the worst period for home prices in decades, the Augusta market stayed steady. Mortgage rates are low. Prices are reasonable. It's still a great time to buy a home here...