The home-price deterioration that typically accompanies the winter season has arrived early, Clear Capital reports. According to the company's latest Home Data Index (HDI) Market Report, which covers data through September, quarter-over-quarter home prices fell nationally by 0.2% last month.
‘With the effects of the recession still being felt by home buyers and sellers, the lack of demand is causing strong markets to lose their upward momentum, while sending weak markets into double-dip territory,’ says Alex Villacorta, senior statistician with Clear Capital. ‘National prices are still 10 percent above their 2009 lows, so the risk of new record lows this year remains small.’
The West, Midwest and South regions each experienced home price drops quarter-over-quarter, and all four regions kept their year-over-year price gains, Clear Capital says.
The real estate owned (REO) saturation rate rose slightly to 23.2% – still well below the 41% REO saturation peak seen in the first quarter of 2009. The decision by several large servicers – including Bank of America, Chase and Ally – to temporarily halt foreclosures means the saturation rate is unlikely to grow in the near future. However, a lack of demand for REOs will keep the rate from dropping significantly.
‘In the long term, it's probable the current moratoriums will add to the backlog of distressed inventory, ultimately placing more pressure for REOs to be released into the market,’ the HDI report says.
The REO saturation rate did move upward in the worst-performing metropolitan statistical areas, Clear Capital adds. Areas like Phoenix and Tucson, Ariz.; Atlanta and Las Vegas continue to face large REO saturation rates.
‘In markets where REO-saturation influences are returning, prices are likely to suffer disproportionately from the national trend in upcoming months – possibly pushing these markets into double-dip territory,’ Clear Capital cautions.
The full report can be viewed here.
SOURCE: Clear Capital