January 25, 2012 (Jeff Alan)
The national average home price fell 0.8 percent to $200,000 for transactions completed in October according to Lender Processing Services (LPS) Home Price Index (HPI) for January leaving home prices at October 2002 levels.
The price decline follows a 1.2 percent decline in September and is consistent with the seasonal fall patterns experienced by the housing market since 2009. The average home price was 4.8 percent below October 2010’s prices and is 2.7 percent below the average price of a home at the beginning of 2011. It was the fifth consecutive month that the Index posted a decline in home prices.
The LPS HPI summarizes national home prices by tracking monthly prices in over 13,500 ZIP codes covering 437 Metropolitan Statistical Areas (MSAs) and covers about 75 percent of the single-family properties in the U.S.
Average home prices peaked at $282,000 in June 2006 with the most rapid decline in home prices occurring between July 31, 2007, and December, 2009, when prices declined $56,000 from the market’s peak, an annual decline of 13.8 percent. Since that time, the annual rate of decline has slowed to an average of 4.2 percent, with home prices declining an additional $26,000 during that time.
The total value of U.S. housing inventory covered by the Index stood at $10.6 trillion at the market peak and was valued at $7.5 trillion at the end of October, a decline of 30.1 percent.
Twenty-four of the 26 largest MSAs in the Index posted a monthly decline in prices with the largest losses posted in Atlanta (-3.9%), Seattle (-1.4%), Chicago (-1.3%) and St. Louis (-1.3%). Phoenix (+0.5%) was the only MSA to post an increase and Miami remained unchanged from the previous month.
Since the beginning of 2011 through the end of October, only 8 of the 26 largest MSAs have posted an increase in average home prices with largest gains posted in Detroit (+9.6%), Pittsburgh (+2.2%) and Cincinnati (+1.3%), while the largest losses have occurred in Atlanta (-21.8%), Los Angeles (-5.1%), San Francisco (-5.1%) and Seattle (-5.1%).
Year-over-year, only three of the 26 MSAs have posted an increase in average home prices led again by Detroit with a gain of 7.0 percent. The largest decline in home prices was also in Atlanta where prices have fallen 24.3 percent in the last year.
Average home prices in four MSA’s, Detroit, Atlanta, Cleveland and Phoenix, are currently 42.4, 30.2, 9.3 and 7.8 percent below January 2000 levels, respectively.
Early, partial data for November’s sales indicates that a likely home price decline of approximately 0.5 percent will be posted for the month.
Tags: average home price, home price index, market peak, MSAs, rapid price decline