June 24, 2011 (Shirley Allen)
Home prices increased 2.0 percent from March to April 2011 according to Radar Logic’s April 2011 RPX Monthly Housing Market Report, but were still down 5.1 percent compared to April 2010.
Radar Logic blamed the year-over-year price drop on widespread negative equity, a backlogged foreclosure pipeline, and severe oversupply. Prices also received a boost last year as homes in April 2010 were influenced by the large influx of homebuyers trying to take advantage of the homebuyer’s tax credits before they ended
“Clearly, the very large supply of homes for sale or potentially for sale is weighing heavily on the market,” said Michael Feder, president and CEO of Radar Logic. “Perhaps more worrisome is the clearly established discount on distressed properties. Reason would suggest this discount reflects the level at which buyers are comfortable they can achieve a reasonable rate of return. We expect this situation will continue for some time and will deter any truly robust economic recovery.”
Buyers shifted away from purchasing foreclosed homes in April as non-foreclosed homes outsold foreclosed homes. Foreclosed homes sold at a 39 percent discount on average compared to non-foreclosed homes and had it not been for the decline in foreclosure sales as a percentage of total sales, the month-over-month price increase would have been smaller.
Home sales also increased from March to April by 11.6 percent, but year-over-year sales were down by 9.2 percent as the market had to contend with the post- homebuyer tax credit hangover.
Foreclosed homes sales accounted for 30 percent of all homes sold during April which was down from 33 percent in March.
Of the 25 Metropolitan Statistical Areas (MSA), only three reported price decreases in month-over-month comparisons. The top gainer was Atlanta which saw a price gain of 12.0 percent. Seattle and San Diego both reported the largest declines of 1.2 percent
All of the MSAs experienced price declines in year-over-year comparisons, with New York reporting the smallest decline of 0.2 percent and Boston reporting the largest price decline of 21.8 percent.
Tags: Radar Logic, home prices, home sales, distressed properties, price discount, foreclosure sales, foreclosed homes, homebuyer tax credit