U.S. home prices double dip as West, South and Northeast regions fall prey to the last grip of winter.
TRUCKEE, CA – May 5, 2011 – Clear Capital (www.clearcapital.com) today released its monthly Home Data Index™ (HDI) Market Report, and reports prices have double dipped nationally 0.7 percent below prior lows experienced in March 2009. This month’s HDI Market Report provides the most current (through April 2011) and relevant analysis of how local markets performed compared to the national trend in home prices.
Report highlights include:
- National quarterly home prices changed -4.9%; while year-over-year national price changes reached -5.0%.
- National home prices have fallen 11.5% over the previous nine-month period, a rate of decline not experienced since 2008.
- In a sign of the continued volatility and fragility of home prices, all the major Metropolitan Statistical Areas (MSA) tracked in this month’s report showed quarter-over-quarter price declines.
- National REO saturation rate reaches 34.5%.
“The latest data through April shows a continued increase in the proportion of distressed sales that are taking hold in markets nationwide,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales.
In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season,” added Villacorta.
As national home prices reached new lows this past winter, hopes remain for a spring revival. Markets have entered uncharted territory, however, as this current home buying season will be the first since 2008 without any tax credit incentive. A note of caution to those looking for a strong end to 2011: The last time no incentives were in place and distressed inventories were this high, home prices fell sharply.
Home Price and REO Saturation Parallels to 2008
Past market reports have shown periods of stabilization. Movements of home prices certainly have been less dramatic than during the start of the downturn in 2006, and two years of mixed seasonal gains and losses have given the appearance that prices are stabilizing, or at least bouncing along a trough.
This assumption of stabilization also considers the last two years have marked a period of external stimulus in the form of tax credits. As an alternative and cautionary reference, below is a comparison between the housing market from spring 2008, through the end of the year; compared to the post tax credit period of late 2010 through April 2011.
National REO Saturation (2008 to 2011)
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