Dennis Norman
Home Prices Exhibit “Improving Declines” (sounds rather oxymoronic, huh?)
In a report issued by First American CoreLogic national home prices continue to decline with their HPI (Loan Performance Home Price Index) declining by 3.7 percent in December 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 3.3 percent.
Forecast Shows-Continue Short-term Declines
First American CoreLogic’s forecast continues to project declining house prices into the spring months. The national HPI is projected to fall an average of 4.4 percent through April 2010, as high levels of unemployment, housing inventories and foreclosures continue to exert downward pressure on prices. The forecast indicates that April will be a critical month for the housing market, given the current scheduled expiration of the federal homebuyer tax credit. While the tax credit provided some significant support to house prices in 2009, the forecast model currently indicates that the future path of house prices after April will be significantly impacted by whether the tax credit is allowed to expire or is once again extended. Nationally, the HPI 12-month forecast is expected to be up 3.5 percent excluding distressed sales; and up 2.7 percent including distressed sales by December 2010.
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Including distressed transactions, the HPI (home price index) has fallen 28.2 percent nationally through December from its peak in April 2006. Excluding distressed properties, the national HPI has fallen 21.5 percent from the same period.
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When distressed sales were included Nevada (-20.8 percent) remained the top-ranked state for annual price depreciation followed by Arizona (-12.6 percent), Idaho (-11.4), Florida (-11.3 percent) and Michigan (-10.8 percent). Of these five states all but Michigan showed month over month descreases in home prices from November to December.
- Excluding distressed sales, the worst five states for year-over-year price declines changes slightly. Nevada (-18.8 percent) still holds the top spot, followed by Arizona (-11.8 percent), Florida (-10.3 percent), Michigan (-10.0 percent) and Maine (-9.1 percent).
“The housing market, after experiencing stabilization in many, but not all, markets in the spring and summer of 2009 is going through the typical seasonal winter malaise,” said Mark Fleming, chief economist for First American CoreLogic. “The big unknown for the 2010 spring selling season continues to be the future of the federal home buyer tax credit,” he said.
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