National home prices, including distressed sales, declined by 9.8% in September 2009 compared to September 2008, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI). This was an improvement over August's revised year-over-year price decline of 11.1%.
On a month-over-month basis, however, national home prices declined by 0.4% in September 2009 compared to August 2009, reversing a five-month trend of positive appreciation. The August-to-September decline suggests the return of seasonal housing price patterns, First American CoreLogic says.
"We have now seen a return of more traditional seasonal patterns with the slight decrease in our month-over-month HPI for September," says Mark Fleming, chief economist for First American CoreLogic.Â "While the improvement in the year-over-year decline is encouraging, high foreclosure rates and increasing distressed sales are likely to continue to hold prices down."Â Â Â
Excluding distressed sales, year-over-year prices declined by 6% in September. (In August, non-distressed sales fell by 6.2% year-over-year.) This underscores the negative impact that distressed sales have on the HPI, as distressed sales continue to decline at a larger annual rate than non-distressed sales.Â
When distressed sales were included, Nevada remained the top-ranked state for annual price depreciation (25.5%), with Arizona following close behind (20.3%). Florida (17.7%), Michigan (15.1%) and Idaho (14.9%) round out the top five states for price declines. All five of these states 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 (20.4% decline) still holds the top spot, followed by Arizona (15.4%), Florida (14.8%) Idaho (10.9%) and Washington (10.3%).
First American CoreLogic forecasts continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring. Above-average levels of foreclosures, inventories and unemployment will continue to take their toll in many major metropolitan markets in the short term, the company says.
As the economy continues to improve and these factors improve, the forecast calls for housing prices to bottom out for most markets by March 2010 and then turn positive, which would yield the first positive year-over-year house-price appreciation since the beginning of 2007.
In September 2010, the forecast is projecting that 12-month appreciation for national home prices, excluding distressed sales, will be 1.1%, bringing price levels for that segment of the market back to May 2004 levels. The 12-month forecast is more negative now than in August as a result of recent increases in the unemployment rate.Â
SOURCE: First American CoreLogic