March 12, 2012 (Jeff Alan)
The decline in home prices softened in the current rolling quarter ending in February, declining only 0.6 percent after declining by 1.6 percent the previous month according to Clear Capital’s Home Data Index (HDI).
Prices at the end of February were 1.9 percent lower than they were at the end of February last year, a step down from the 2.6 percent year-over-year price decline posted at the end of January. It was the 18th consecutive month that annual home prices have declined but it was also the smallest year-over-year price difference in ten months.
The bulk of the decline continued to originate out of the Midwest region where prices declined 1.8 percent in the latest quarter while the rest of the regions saw declines of less than one percent. February’s price decline in the Midwest was still far less than the 4.0 percent decline in January.
Quarterly home prices in the West fell 0.4 percent, and in the South, home prices declined 0.2 percent. Home prices in the Northeast posted the smallest decline of 0.1 percent.
Three of the four regions posted year-over-year declines with the Midwest also suffering the largest decline (-4.3%), followed by the West (-3.2%), and the South (-0.8%), with the Northeast (+0.5%) being the only region to post an increase.
Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital said, “Home prices across the nation saw light levels of depreciation in February, consistent with the trend we have seen over the last several months. However, the Northeast, Midwest, and West improved performance against last month’s quarterly declines in light of increases in REO saturation, which is unusual and encouraging.”
The top performing markets over the latest quarter were Providence, RI – New Bedford, MA – Fall River, MA (+7.3%), Phoenix, AZ – Mesa, AZ – Scottsdale, AZ (+5.8%), Columbus, OH (+3.6%), Washington D.C. (+2.9%) and Pittsburgh, PA (+2.7%).
Thirteen markets showed gains of over one percent, up from ten last month. Phoenix, along with Las Vegas, which had long been the poster child of the housing crisis, has actually seen prices rise 7.3 percent year-over-year, meanwhile, Las Vegas cracked the Top 15 with a quarterly price increase of 0.8 percent.
The worst performing markets over the latest quarter were Cleveland, OH – Elyria, OH – Mentor, OH (-9.4%), Milwaukee, WI – Waukesha, WI – West Allis, WI (-9.0%), Birmingham, AL – Hoover, AL (-6.2%), Seattle, WA – Tacoma, WA – Bellevue, WA
(-5.2%) and Atlanta, GA -Sandy Springs, GA -Marietta, GA (-4.8%).
All 15 of the worst performing markets reported quarterly losses, though the losses on average were less than last month and none of the markets were over ten percent. The average REO saturation rate for the worst performing markets was 30.9 percent, 19.8 percent higher than the national REO saturation rate.
REO sales as a percentage of total home sales increased from 25.4 percent at the end of January to 25.8 percent at the end of February.
“With this uptick in REO activity, we’ll be keeping a very close eye on the effects of the Attorneys General settlement with servicers, as it could dramatically change the flow of REO properties moving through the foreclosure process and significantly impact values in the near future. The good news is the improvements in the job market, stronger consumer confidence, and the heightened activity of investors – often with cash – in the lower price tiers. These effects put upward pressure on prices, and could be in play with the resiliency we’re seeing in prices against increasing REO this month,” added Villacorta.
Tags: Clear Capital, housing prices, price declines, REO, saturation rate, consumer demand, metropolitan areas
Source:
Clear Capital
