The real estate market is moving further away from the period of peak distress in home prices, and prices are exhibiting ‘improving declines,’ First American CoreLogic says.
National home prices, including distressed sales, declined by 3.7% in December 2009 compared to December 2008, according to the company's LoanPerformance Home Price Index (HPI). The decline was a significant improvement over November's year-over-year price decline of 5.3%.
Excluding distressed sales, year-over-year prices declined in December by 3.3%, and in November, the non-distressed HPI fell by 5% year-over-year. On a month-over-month basis, the national average of home prices declined moderately, falling by 1% in December 2009 compared to November 2009, indicating seasonal slowing in a fledging housing recovery.
When distressed sales were included, Nevada (-20.8%) remained the top-ranked state for annual price depreciation in December, followed by Arizona (-12.6%), Idaho (-11.4%), Florida (-11.3%) and Michigan (-10.8%). Of these five states, all but Michigan showed month-over-month decreases in their HPI between November and December 2009.
Excluding distressed sales, the worst five states for year-over-year price declines changes slightly. Nevada still holds the top spot, followed by Arizona, Florida, Michigan and Maine.
First American CoreLogic's continues to project declining house prices into the spring months. The national HPI is projected to fall by an average of 4.4% through April, as high levels of unemployment, housing inventories and foreclosures continue to exert downward pressure on prices.
"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," says 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."
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%, excluding distressed sales, and up 2.7%, including distressed sales, by this December.
SOURCE: First American CoreLogic