With the end of 2014, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In July, we published data on new home prices by state and metro areas.
The distribution of new home prices by metro area largely mirrors the state pattern with most expensive new homes clustered in the coastal areas of California, Hawaii and the Northeast region. Bridgeport-Stamford-Norwalk, CT metro area registers the highest median new home price in the nation with half of all new single-family homes sold for more than $878,625. Barnstable Town, MA and Napa, CA metro areas are distant second and third with median new home prices of $616,381 and $580,197, respectively. The least expensive new homes are in Brownsville-Harlingen, TX metro area, where half of all new single-family homes is built and sold for less than $116, 704.
To estimate median new home prices by state and metro NAHB Economics relies on data from Census Bureau’s Building Permits Survey and Survey of Construction (SOC). The Permits Survey provides both the number and aggregate value of new housing units authorized by building permits and, thus, allows calculating average permit values for all metro areas and states. For metro areas where average permit values are highly volatile and likely to have a large margin of error, the averages are smoothed out across most recent years. However, permit values do not include brokerage commissions, marketing/finance costs, the cost of raw land and may not include the cost of lot’s development. These additional costs are likely to differ across geographic areas but not available for metro areas and states. To account for these additional costs, NAHB Economics estimates ratios of median new home prices to average permit value for nine Census divisions available in the SOC and then uses the division-wide ratios to convert average permit values into median new home prices.
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