US Home Prices Fall for Third Consecutive Month says CoreLogic

US Home prices continued to decline in October, down 3.93 percent from October 2009 according to CoreLogic Home Price Index.

Excluding distressed sales, year-over-year prices declined by 1.5 percent in October 2010 compared to October 2009.

“We are continuing to see the weakness in home prices without artificial government support in the form of tax credits. The stubborn unemployment levels and seasonality are also coming into play,” said Mark Fleming, chief economist for CoreLogic. “When you combine these factors with high shadow and visible inventories, the prospect for a housing recovery in early 2011 is fading.”

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Not all the data is negative, the five states with the highest appreciation were North Dakota (+4.61 percent), West Virginia (+3.43 percent), Vermont (+2.59 percent), Maine (+1.97 percent) and Wyoming (+1.93 percent).

Including distressed sales, the five states with the greatest depreciation were Idaho (-15.06 percent), Alabama (-9.30 percent), Oregon (-8.50 percent), Arizona (-8.25 percent) and Florida (-8.00 percent).

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  • Without home appreciation, where is the growth in HECM endorsements going to come from? Two of the states where home depreciation in values are the worst are two states where HECM origination is traditionally very highly concentrated. Which of the states where home appreciation in value is best, are states where HECM origination will be so highly concentrated that it will make up for the others?

    This is where the rubber meets the road. If origination volume is not significantly up by the end of May 2011, where will all of the endorsements come from which will make fiscal 2011 even close to comparable to fiscal 2007 (forget about fiscal 2009 when endorsement volume stood at 114,692)? The endorsements of last fiscal year (78,757) were about 3% higher than fiscal 2006. That gives our prognosticators a head start in achieving the volume level of fiscal 2007 of 107,558.

    May be HUD is right to predict only 75,000 endorsements for this fiscal year? I am still hoping for 82,000 or so; even the actuaries seem overly optimistic at less than 86,000 based on current economic realities.

    At the time of the NRMLA convention, there was just under 7 months to achieve the fiscal year endorsement predictions through new originations being bandied around. This fiscal year ends on September 30, 2011 and with an alleged four month lag between origination and endorsement of about 4 months; that means historically origination cut off to be endorsed before October 1 is around June 1. What is it that these leaders see that some of the rest of us don’t? Does anyone actually have the nerve to say they believe it will be done when two of those months are the last part of November, all of December, and the first part of January? That leaves less than 5 months to watch this heady volume spring forth. I hope the endorsement volume proves John Lunde and Jeff Lewis right and put the volume prediction of this cynic in its place.

    Why do we need wild predictions? Is it merely to bring our sales forces to a screaming frenzy? The prospect for origination volume this summer seems to have signs of growth and for the summer of 2012 yet more. Fiscal 2013 seems to be the first fiscal year we will see endorsement volume above the level it was in fiscal 2009, IF things turn around.

    As to the stratospheric prognostications in endorsement volume made in New Orleans last month and RMD earlier, let it be said, The_Cynic remains very skeptical, yes, even cynical.

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