House prices in rural America grew more rapidly over the last ten years than they did in metropolitan areas, according to a new government survey.

Just the opposite was true during the 1980s, when inflation-adjusted house prices in rural areas actually declined by an average of 8 percent.

But according to a study by the Office of Federal Housing Enterprise Oversight, rural areas have grown more rapidly throughout most of the '90s. Indeed, while rural areas were experiencing "modest appreciation," the agency found, metro areas were seeing "significant declines." And as a result, the gap between housing prices in the country and those in the city has narrowed considerably.

This was particularly noticeable in the Pacific Region, reports OFHEO, the federal agency which oversees the financial safety and soundness of Fannie Mae and Freddie Mac, the two government chartered institutions charged with keeping money flowing to America's home buyers.

In the Pacific states Alaska, California, Hawaii, Oregon and Washington prices of homes in the country lost significant ground in the '80s. By 1990, metro house prices had risen 37 percent while rural prices had fallen 10 percent. But in the early and mid '90s, metro prices went bust while rural areas continued to post gains. And by 1997, rural prices had fallen only 7 percent relative to city prices.

OFHEO and others attribute this phenomena largely to technological advances that have made business less dependent on location. Thus, not only have families found rural communities more desirable, so have the companies they work for. But even businesses which stay behind in the central cities are allowing their employees the opportunity to telecommunicate from their rural residences.

They agency also suggests that metro prices might has reached "their natural equilibrium" as builders have moved out to rural locations where land is more plentiful and less expensive, and where there are fewer regulatory barriers to construction. Once prices reach a point where the previous rate of increase cannot be sustained, OFHEO points out, the cycle turns and prices no longer rise month after month or year after year.

Published: June 6, 2000

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.