Non-Distressed Property Prices 30 Pct Less than Distressed Since Market Peak

January 13, 2012 (Chris Moore)

Home prices continued to follow normal seasonal trends in November, falling another 1.4 percent from the previous month according to CoreLogic’s November Home Price Index (HPI). November’s price decline follows a 1.3 percent decline in October and is the fourth consecutive month that home prices have fallen.

Including distressed property sales, home prices in November were 4.3 percent lower than in November of last year. It was the first monthly increase in year-over-year prices since April. This follows a revised decline in annual home prices of 3.7 percent in October which had been part of a seven month streak in which year-over-year home prices declined in each successive month.

In September, the year-over-year price difference, including distressed properties, was -3.8 percent, in August it was -4.4 percent, in July it was -4.8 percent, in June it was -6.0 percent, in May it was -7.4 percent and in April the annual price difference was -7.5 percent.

The impact that distressed property sales have had on housing prices since the beginning of the housing crisis has been significant. In November, the difference in year-over-year prices would have only been 0.6 percent lower if distressed property sales were excluded.

Since the market peak in April 2006, home prices have declined 32.8 percent when including distressed property sales and when excluding distressed property sales, home prices have dropped 23.1 percent since the market peak, a difference of 29.5 percent.

CoreLogic defines distressed property sales as short sales and real estate owned (REO) transactions.

Mark Fleming, chief economist for CoreLogic, stated, “With one month of data left to report, it appears that the healthy, non-distressed market will be very modestly down in 2011. Distressed sales continue to put downward pressure on prices, and is a factor that must be addressed in 2012 for a housing recovery to become a reality.”

Seventy-seven out of the top 100 Core Based Statistical Areas (CBSAs) experienced year-over-year price declines in November, which was three less than the revised amount reported in October.

The five states with the highest year-over-year (YOY) appreciation including distressed sales were: Vermont (+4.3 percent), South Carolina (+2.8 percent), District of Columbia (+2.1 percent), Nebraska (+1.9 percent) and New York (+1.7 percent). In October, those states were: West Virginia (+4.8 percent), South Dakota (+3.1 percent), New York (+3.0 percent), District of Columbia (+2.4 percent) and Alaska (+2.1 percent).

The five states with the greatest YOY depreciation including distressed sales were: Nevada (-11.2 percent), Illinois (-9.7 percent), Minnesota (-7.8 percent), Georgia (-7.7 percent) and Ohio (-7.2 percent). In October, those states were Nevada (-12.1 percent), Illinois (-9.4 percent), Arizona (-8.1 percent), Minnesota (-7.9 percent) and Georgia (-7.3 percent).

The five states with the highest YOY appreciation excluding distressed sales were: Maine (+4.9 percent), South Carolina (+4.9 percent), Montana (+3.8 percent), Indiana (+3.3 percent) and Louisiana (+2.4 percent). In October, those states were: South Carolina (+4.6 percent), Maine (+3.1 percent), New York (+3.1 percent), Alaska (+2.9 percent) and Kansas (+2.8 percent).

The five states with the greatest YOY depreciation excluding distressed sales were: Nevada (-8.8 percent), Arizona (-4.9 percent), Minnesota (-4.7 percent), Idaho (-4.1 percent) and Georgia (-3.6 percent). In October, those states were: Nevada (-8.8 percent), Arizona (-7.0 percent), Minnesota (-5.7 percent), Delaware (-3.9 percent) and Georgia (-3.6 percent).

Tags: CoreLogic, home prices, distressed property sales, appreciation, depreciation, flat growth

Sources:
CoreLogic