- Dennis Norman
According to a report issued by First American CoreLogic national home prices continue to decline with their HPI (Loan Performance Home Price Index) declining by 9.8 percent in September 2009 compared with the year before. If you take the distressed sales out (foreclosures, short sales, etc) the nation decline in HIP for the same period was 6.2 percent.
First American CoreLogic is forecasting continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring. The report cites above average levels of foreclosures, inventories and unemployment as sources of downward pressure in many major metropolitan markets in the short term. The report forecasts that the housing market will bottom out in most markets by March 2010 and then turn positive. If this happens, or when it happens (the positve part) it will be the first time this index has seen positive year-over-year house price appreciation since the beginning of 2007.
The report forecasts that the home price index will show 1.1 percent appreciation (excluding distressed sales).
Other highlights of the report include:
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Including distressed transactions, the HPI has fallen -29.9 percent from its peak in April 2006. Excluding distressed properties, the national HPI has fallen -20.9 percent from the same peak.
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When distressed sales were included Nevada (-25.5 percent) remained the top-ranked state for annual price depreciation with Arizona following close behind (-20.3 percent). Florida (-17.7 percent), Michigan (-15.1 percent) and Idaho (-14.9 percent) round out the top five states for price declines. All five of these states also showed month-over-month decreases in their HPI.
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Excluding distressed sales, the worst five states for year-over-year price declines changes slightly. Nevada (-20.4 percent) still holds the top spot, followed by Arizona (-15.4 percent), Florida (-14.8 percent), Idaho (-10.9 percent) and Washington (-10.3 percent).
CoreLogic’s approach to obtaining pricing data is excellent in my opinion. Instead of just basing their data on median home prices they look at “repeat sales” and, according to information provided by the company, more than 30 years worth of repeat sales transactions, representing more than 45 million observations.
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