Doom and gloom have dominated news stories about the real estate market of late.
However, things here may not be so bad after all.
Recent data from the Office of Federal Housing Enterprise Oversight indicate Lancaster County home values rose 2.77 percent in the first quarter of 2008 and 4.66 over the past 12 months.
That put the county 36th out of 292 metropolitan areas nationwide in terms of home price appreciation — good news for local homeowners and sellers.
Nationally, the OFHEO's all-transactions House Price Index shows prices fell 0.2 percent in the first quarter and were flat over the past year.
The "all-transactions" index includes home sales and refinancing by existing homeowners.
On the surface, the OFHEO numbers might appear to contradict other indicators. For example, the Lancaster County Association of Realtors reported the average price of houses sold in April dropped nearly 9 percent compared to April 2007.
However, the statistics are measuring different things.
The Realtors' numbers reflect only the small number of houses actually on the market at a given time. They don't measure the county's home values overall, Randy Hess, president of Building Industry Association of Lancaster County, said.
"That's a misconception," Hess said. "The (average price) doesn't mean the average home value dropped 9 percent. It just means that we sold a lot less expensive houses (compared) to last year."
Jeff Geoghan, vice president of Coldwell Banker Select, said the OFHEO index provides a more accurate picture of overall home value than other measures because it tracks the same houses over time.
"This report is more of an apples-to-apples comparison, where the mortgages of homes sold are compared with the buyer's mortgages," Geoghan said.
Also, it excludes very high-priced homes and homes financed by subprime and other riskier mortgages.
By comparison, the Standard & Poor's/Case-Shiller index, which doesn't exclude riskier mortgages, reported home prices dipped 14.1 percent in the first quarter in major U.S. metropolitan areas.
Other nearby metropolitan areas scored well in the OFHEO index.
Harrisburg-Carlisle ranked 54th and posted a 4 percent increase in the first quarter. Reading was 104th with a 2.56 bump in home value, and Philadelphia ranked 146th, gaining a 1.51 percent appreciation.
Hess described the Lancaster housing market as "stable," saying it has avoided the violent price fluctuations that besieged other markets.
Hess agreed with Geoghan that the OFHEO index offers the best barometer of the market.
According to the index, prices fell in 43 states, with California and Nevada showing the biggest declines. Home prices in those two states dropped more than 8 percent each.
Home prices dropped nearly 25 percent over 12 months in Merced, Calif., northwest of Fresno. That was the biggest depreciation of any metropolitan area.
"Those who party the hardest have the worst hangover," Hess said. "We had some pretty aggressive appreciation for a couple of years, but we didn't have the double-digit hikes or the 40 to 50 percent annual appreciation elsewhere."
Lancaster home values rose nearly 48 percent during the past five years, according to the home price index.
Geoghan said he's not surprised the Lancaster market is ranked so high in the report. He suggested the national market will grow anew once the mortgage companies regroup from the current credit crunch.
"We'll see new products available for first-time buyers, and that will help sales to recover, he said.
In the meantime, he said, Lancaster residents should find comfort in that the federal housing numbers reinforce what local real estate professionals and home buyers already know:
"Lancaster is not in a tailspin."
E-mail: pburns@lnpnews.com