Dennis Norman
In spite of recent “upbeat” reports on the housing market and some people even saying the worst is over, when it comes to declining home values it appears the fat lady hasn’t sung yet
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 7.8 percent in October 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 5.8 percent.
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Cities in the Rust Belt states of Michigan and Ohio have replaced the Sun Belt cities of California, Nevada, Arizona and Florida as those areas for which the largest HPI declines are predicted. Over the next six months, large declines in the HPI are predicted in Detroit (-12.7 percent), Warren-Troy-Farmington Hills (-11.4 percent), and Cleveland (-6.3 percent).
- Cities that are projected to experience the strongest recovery in 2010 are primarily concentrated in the large urban areas of California: San Francisco (+5.7 percent), Los Angeles (+5.0 percent), San Diego (+4.7 percent) and Sacramento (+4.6 percent).
Other highlights of the report include:
- Including distressed transactions, the national HPI has fallen -30.1 percent from its peak in April 2006. Excluding distressed properties, the national HPI has fallen -21.5 percent from the same peak.
- When distressed sales were included, Nevada (-24.3 percent) remained the top-ranked state for annual price depreciation, followed by Arizona (-17.3 percent), Florida (-15.5 percent), Michigan (-13.9 percent) and Idaho (-12.1 percent). Of these, Nevada, Florida and Michigan also showed month-over-month decreases in their HPI.
- Excluding distressed sales, the worst five states for year-over-year price declines changes slightly. Nevada (-20.2 percent) still holds the top spot, followed by Arizona (-14.7 percent), Florida (-13.7 percent), West Virginia (-10.4 percent) and Washington (-9.4 percent).
“We are continuing to see improvements in the year-over-year home price change as prices have remained relatively stable since April,” said Mark Fleming, chief economist for First American CoreLogic. “The additional government support for the housing market has stimulated demand and restricted supply in 2009. How these government supports are removed in 2010 and the moderation of pending inventory and negative equity will be critical to the continued stability of the housing market,” he said.
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