Home Price Index Shows Decline, Annual Prices Stabilize

CoreLogic released its December Home Price Index (HPI), showing that home prices declined for the fifth month in a row in the U.S. According to the HPI, national home prices including distressed sales fell 5.46 percent in December compared with December 2009. Excluding distressed sales, the December year-over-year change was -2.31 percent.

Annual data for 2010, however, showed stabilized home prices with CoreLogic’s HPI depicting no change when compared with 2009.



“It was a bumpy ride which ended with a net gain/loss of zero,” said Mark Fleming, chief economist for CoreLogic. “Despite the continued monthly decline in home prices and year-over-year depreciation, we’re encouraged that on an annual basis we’re unchanged relative to a year ago. Excess supply continues to drive prices downward, but the silver lining is that the rate of decline is decelerating,” he said. He attributed the “bumpy ride” to improved tax credits following declines as credits expired.

According to the CoreLogic December HPI data, the five states with the highest appreciation in home sales were North Dakota (+5.53 percent), Hawaii (+3.79 percent), West Virginia (+3.74 percent), New York (+1.66 percent) and Vermont (+.65 percent).

States experiencing the highest depreciation were Idaho (-14.61 percent), Alabama (-13.14 percent), Arizona (-10.94 percent), Oregon (-9.6 percent) and Missouri (-8.82 percent).

For the largest core based statistical areas, Phoenix experienced a 9.74% HPI decline; for Chicago, a 6.59% decline; and for Atlanta, home prices lost 6.43%; according to the index.

Over the longer team, 2010 shows the first non-negative year for the CoreLogic HPI since 2006. The peak-to-current change in the national HPI (April 2006 to December 2010) was -31.6 percent.

Written by Elizabeth Ecker

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  • It is extraordinary to read that losses for the fifth straight month does not show a declining trend which overrules the prior calendar year where there is a small net loss, especially with the knowledge that servicers have to a great degree suspended foreclosures. When servicers begin to resume normal foreclosure activities, the backlog of irreversible defaults could flood the market with foreclosed properties over the next two calendar quarters.

    It is interesting that this is not the only prognosticator who is citing a positive sign in the midst of decline. It is good to see that California and Florida are not in the bottom of the heap. It seems that Arizona is in such a downward cycle that home values have not yet found anything close to bottom; that in itself is a cause for concern. Not long ago, Oregon was thought to have been a haven against home value losses which is clearly not the case today.

    While reverse mortgage naysayers and well meaning senior advocates are distractions (who will always be with us), the real enemy to providing seniors the financing they need is the continuing loss in home values. While the Administration may be touting the recent reduction in the alleged unemployment rate to “only” 9% nationally, it is this issue which will haunt home value appreciation for many quarters to come.

    The wild mortgage market of the last decade was disastrous. It is no wonder that B of A is reorganizing to address that issue. Like all large businesses, sometimes it takes a while before reality starts sinking in. The merger and acquisition legacy of Ken Lewis will haunt B of A for years.

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