How Distressed Properties Are Affecting Home Values

October 26 2010 (Jeff Alan)
homes sales signs
In a report released by real estate analyst CoreLogic, shows home prices excluding distressed sales declined 0.4 percent in August 2010 compared to a year earlier. Some 78 out of 100 metropolitan areas experienced price declines in August, up from 58 in July.

But the real story in the report was the price difference between distressed properties and non-distressed properties.

Including distressed transactions, the peak to current decline in the national home price index, from April 2006 to August 2010 is -28.2 percent. Excluding distressed properties, the peak-to-current change in the index is 19.6 percent. A forty percent difference.

April 2006 is considered to be the month that home prices peaked before starting their long decline due to the current mortgage and economic crisis.

 The five states with the highest appreciation in August, including distressed sales, were:

· Maine, + 5.8 percent
· New York, +3.7 percent
· Connecticut, +2.5 percent
· Virginia, +2.4 percent
· South Dakota, +2.1 percent

The five states with the greatest depreciation in August, including distressed sales, were:

· Idaho, -14 percent
· Alabama, -10.4 percent
· Utah, -7.3 percent
· Oregon, -6.3 percent
· Florida, – 6.2 percent

Excluding distressed sales, the five states with highest August appreciation were:

· New York, +5 percent
· South Dakota, +4 percent
· Connecticut, +3.1 percent
· North Dakota, +3 percent
· Vermont, +2.7 percent

Excluding distressed sales, the five states with the greatest August depreciation were:

· Idaho, – 11.3 percent
· Michigan, -7.6 percent
· Arizona, -6.5 percent
· Nevada, -6.3 percent
· Utah, -4.7 percent