How much do homes cost?

Existing homes run the gamut from $40,000 (or less) condominiums to $1 million-plus single-family homes. New homes are more expensive, generally running anywhere from $125,000 and up, depending on location, size and amenities. We can narrow the ranges down to a more digestible number by looking at the National Association of REALTORS’ (NAR’s) latest statistics, which reported a national median existing home price (half of the homes sold for less, half sold for more) of $169,900 in 2003, an 8 percent increase over the 2002 median home price of $158,100. The national median new-home (newly constructed) sales price was $194,500 in 2003, up about 3.7 percent over 2002. NAR forecasted the median existing-home price to grow by 4.6 percent in 2004, while new homes were expected to increase by 5.1 percent.
Using NAR’s statistics as a guide, it’s clear that home buyers have been paying more and more for the same homes over the last few years, but the group predicted that the high level of appreciation would level off in 2004. The 8 percent increase across the board in 2003 was the strongest showing since 1980, but NAR expected the percentage to decrease to 4.6 percent for existing homes and 5.1 percent for new homes in 2004, which is good news for you.
Besides consulting with your local paper or online multiple listing service, you can compare home prices across the nation via indexes created by companies like Coldwell Banker, which publishes an annual Home Price Comparison Index (HPCI). You can access more detailed information at the firm’s Web site at www.coldwellbanker.com/homepage.html—click on Home Price Comparison Index.
The cumulative national average sales price of all markets surveyed in the Coldwell Banker_ HPCI was $318,172, a 9 percent increase over 2002. The study’s most expensive market was La Jolla, California ($1,362,375), and the most affordable market was Binghamton, New York ($121,400), indicating a price difference of $1,240,975 for a similar 2,200-square-foot home. Six of the country’s ten most expensive markets were in California, two were in Connecticut, and one each was in Hawaii and Massachusetts. Geography aside, how much you pay for a home depends on the following factors:

• The specific community or neighborhood you’ve selected
• Size of the home
• Age (in years) of the home
• Amenities the home offers
• How eager the home owner is to move out (sometimes urgency can create a ‘‘fast sale’’ environment, which is good for you as the buyer)
• The price of ‘‘comparable’’ homes that have sold in the community/ area recently
• Any other positive (or negative) features of the home or surrounding area (such as sinkholes, proximity to a large highway, or other factors)