PrintNational quarter-over-quarter home prices slid 1.6 percent in January but prices turned positive during the month, the first uptick since mid-August, according to Clear Capital’s Home Data Index.
The year-over-year national decline continued downward during January, but only marginally, with the yearly price change reaching -4.3 percent through January, down from the -4.1 percent reported last month.
The change toward the positive for home prices is the first since mid-August, and signals the end of the pronounced price declines first observed by Clear Capital back in October and reported on more recently by the S&P/Case-Shiller 20 index as well as FHFA’s non-seasonally adjusted national index. Furthermore, this change in prices is especially meaningful as the first months of the year are typically affected by the seasonal slowdown in sales activity, suggesting that buyer demand may be returning in anticipation of a potential start to a sustained recovery.
Slowing sales of bank-owned foreclosures may also explain the change in direction. National REO rates only climbed 1.4 percent after gaining 3.2 percent during the third quarter, indicating that an increasing proportion of fair market transactions are occurring, As the level of distressed transactions decrease, prices tend to increase since the overall market value for an area is less affected by distressed comparable sales. If this trend persists, a leveling off of the national REO sales rate could indicate that home prices are poised for further gains well ahead of the seasonal spring lift.
“This recent national change in price direction is encouraging for the overall housing sector, yet it is still too early to determine whether this current uptick in home prices is a temporary reprieve or the start of a sustained recovery,” said Dr. Alex Villacorta, senior statistician at Clear Capital. “This uptick is the first non-incentivized change in prices we’ve seen since the downturn began, and could provide great opportunity for buyers, sellers and investors alike. Although many markets still remain under significant downward pressure in light of increased distressed sale activities, it is clear that the severity of the downturns observed in October and November have subsided.”
Regionally, many of the lowest performing markets saw their quarterly rates of decline decelerate this month. Nine of the fifteen markets listed above experienced improved quarterly results over last month’s report. The price changes of these markets continue to flatten with the average quarterly decline less than 6.0 percent through January 2011. That’s down from 8.3 percent last month (through December 2010), and 9.8 percent through November 2010.
Only Detroit, MI; Fresno, CA; Las Vegas, NV; Raleigh, NC; San Francisco, CA; and Tampa, FL experienced larger quarterly price declines over last month. Detroit’s -12.4 percent quarterly price change is up 2.7 percentage points from the end of December as the MSA continues to be dogged by high levels of distressed housing activity and a troubled economic environment with double digit unemployment throughout the state.
February 3rd, 2011 at 6:56 pm
The banks are still artificially back REO inventory and the “foreclosure-gate” scandal delayed REO sales even more. This is nothing more than a temporary uptick.