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At least our home values aren't falling

We're No. 18 -- and that's a very good thing.

That's because the Buffalo Niagara region is one of just 18 major U.S. housing markets where home prices actually went up during the fourth quarter.

Not that housing values here are shooting through the roof -- they inched up less than 1 percent to a median price of $106,200, according to the report last week from the National Association of Realtors.

But that's a heck of a lot better than the average drop of 12.4 percent nationally. It means that homeowners in the Buffalo Niagara region are feeling a lot better about their property than people in the 134 other metro areas studied by the real estate group where prices actually went down.

So, as the good people at Forbes magazine proclaim Buffalo as the nation's 8th most miserable city, it only makes you wonder how miserable folks are in the San Francisco-Oakland metro area, where home prices have plunged by almost 38 percent in the last year alone.

Forbes didn't seem to think San Diego and Phoenix were miserable places, either, but all the sunny, summer-like days in the world can't take the sting out of a 36 percent drop in home prices in a mere 12 months.

Mark Zandi, the chief economist at Moody's Economy.com, thinks the nation's housing crisis will get even worse.

The economics forecasting firm issued a report last week predicting that U.S. home prices will fall by another 11 percent before they finally stabilize, leaving the average decline nationally at a stunning 36 percent.

"Notwithstanding the intensifying economic gloom, the bottom of the housing downturn is within sight," Zandi says. Backed by massive efforts to stimulate the economy and prop up the housing market, he expects prices to start bouncing back later this year.

The Economy.com report, which looked at home values in 381 metro areas, predicts that housing prices will drop by at least 10 percent in more than three of every five U.S. cities. In about 100 metro areas, the drop will exceed 20 percent.

Not here, though. Our housing market continues to be the bright spot of the local economy, even as it now is feeling the full brunt of the recession.

A big reason for that, as we know, is that home prices here never zoomed up like they did in other parts of the country. The median sale price here during the fourth quarter was the 23rd-lowest in the country and more than 40 percent lower than the national median of $180,100, according to the realtors group's data.

A bubble that never inflated can't burst. It also means most local buyers could purchase a home without resorting to the risky financing gimmicks that are causing so many of the problems in the housing and banking industry today.

Still, there are signs that the local housing market is weakening. The pace of home sales fell to a six-year low last year, and the rate of the decline accelerated as the credit crisis took hold. November home sales were down 21 percent and December sales slumped by 15 percent, according to the Buffalo Niagara Association of Realtors.

Fewer people are putting their homes on the market, too. New listings plunged by 22 percent in November and 9 percent in December, a sign that home sellers lost some confidence in their ability to sell their homes as the recession's first major wave of job cuts swept over the Buffalo Niagara region.

Still, the housing market is pretty well balanced. There's only about a six-month supply of homes on the market today, which is up from a little more than a five-month inventory at this time last year and the year before. Our fairly normal supply of homes for sale is a lot healthier than the 12.9-month inventory of homes for sale nationally.

There's nothing miserable about that.

e-mail: drobinson@buffnews.com

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