Home sales prices continued a downward trend in May, but only half as far and half as fast as in April,.
Clear Capital’s Home Data Index (HDI) Market Report found that national quarter-over-quarter home price declines (-2.3 percent) were reduced by half from last month’s report, helped by stronger spring sales activity. National yearly price declines reach -7.6 percent, offset from last year’s tax credit induced highs.
The report also found that the REO saturation rate slipped to 33.9 percent, down 0.6 percent from last month’s report and that the quarterly home price change of -13.2 percent keeps Detroit Metropolitan Statistical Area (MSA) the lowest performing market for the fifth consecutive month.
“The latest Market Report results through May suggest that home prices are starting to ease back from the heavy declines seen over the winter,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “We are still far away from the strong demand needed to fully turn things around for the housing market; however, it is clear from the initial spring sales data that prices are softening, suggesting stabilization in the market.
“The saturation rate has leveled off after climbing 10 percent since July 2010, with the latest data showing national REO saturation holding steady at 33 percent,” added Villacorta. “The median price paid for distressed properties has risen over the past three quarters, which is a good sign that the REO market segment is seeing increased activity toward the upper end of this space.”
As winter home prices are replaced with early spring numbers, individual markets are showing signs of recovery. All 15 of the highest performing markets posted improved quarterly gains compared to last month’s report. Peak REO saturation rates have subsided for now and the beginning of the typically positive spring and summer buying season have again started leading the quarterly price changes in a positive direction.
Washington, D.C., Pittsburgh and New York experienced both positive quarterly and yearly price changes. The majority of local markets, however, are still experiencing yearly declines off of last year’s federal tax credit highs. Additionally, all markets except for Miami, New York, Virginia Beach and Washington D.C. saw yearly price changes deteriorate from last month’s report.
Clear Capital’s improving price trend moved in the same direction as Altos Research’s May report which found prices were actually up 8.7 percentage points over the March trough. The difference in the two reports may stem in part from the fact that Altos’ numbers are based on new listing prices on MLSs,. Clear Capital says its data is built on closed sales information available from recorder/assessor offices, which may reflect offers made months ago, and then further enhanced by the company’s “proprietary streaming market data.”