WEEKEND JOURNAL; Home Prices: Our Towns
[As home prices soar, we survey more than 1,000 neighborhoods, finding big gains from Miami to Wayzata, Minn. June Fletcher on unexpected hot spots -- and whether the boom can last.]</br></br>ROBERT ALBERTSON put his five-bedroom lakeside house in tiny Wayzata, Minn., up for sale last year at $1.4 million -- and, almost immediately, pulled it off the market. Calls from eager buyers convinced Mr. Albertson, who helped invent Mr. Coffee, that it was worth waiting to see if prices would rise.</br></br>They did: A few months' delay added another $100,000 to the value of the Tudor-style home, according to two recent appraisals, and he plans to put it back on the market at $1.5 million. Says Mr. Albertson, who bought the house in 1963 for $38,000: "Prices here have just gone crazy."</br></br>What home-price bubble? So far, predictions of the U.S. housing market's demise have been greatly exaggerated. Despite some dark clouds -- war, a looming deficit, the weak dollar -- this market has continued to rise, with existing-home prices up 8.3% through the end of 2004, according to the National Association of Realtors, compared with 7.5% the year before. As low interest rates fueled sales, dozens of cities saw double-digit gains: In Glendale, Calif., where prices had already doubled in the past four years, the median home price rose 29.8% last year, to $440,000. In the old whaling town Marion, Mass., prices rose 13.5%, to an average of $550,000.</br></br>No one can say for sure if this can continue. But at least some homeowners can brag that their neighborhood did even better than most. In a town-by-town survey conducted for Weekend Journal by housing specialists Fiserv CSW, we analyzed home-price changes in more than 1,200 ZIP codes for the year ending September 2004. To get a sense of the longer-term phenomenon, we also looked back at the change in these areas compared with five years ago.