Despite some recent figures indicating home values are beginning to stabilize, new data from Radar Logic shows home prices have fallen to their lowest level since March 2003.
According to the company’s RPX Composite price, the price per square foot fell to $178.12 on February 8, which is 36% below its all-time high of $278.32 per square foot on June 8, 2007. Since then, the price has increased slightly, stabilizing at $178.63 per square foot as of February 17.
The seasonal pattern exhibited by the RPX Composite—which tracks home prices in 25 major US metropolitan areas—suggests that home prices will rise in coming months with the onset of the spring buying season. However, the oversupply of homes currently for sale or in foreclosure could continue to constrain any significant recovery in home values.
“The current data suggest a continuing weak environment driven by too much supply and too few buyers. While we suspect it is harder to get a mortgage than it used to be, we also suspect the real problem is too few people want to,” said Michael Feder, Radar Logic’s CEO. “A house is not currently viewed as the safe investment it once was. When this psychology reverses, we will see a recovery. But that may not be for some time.”
The 25-MSA transaction count, which tracks home sales in the 25 metropolitan areas included in the RPX Composite price, was 1.2 percent lower than during the prior year period. The transaction count increased 15.9 percent on a month-over-month basis, which is consistent with the seasonal pattern exhibited in years past, though the gain is off a relatively low base compared to the boom years at the beginning of the last decade.
The mix of distressed and non-distressed sales has shifted significantly over the last year. In February 2010, sales of foreclosed homes accounted for 30 percent of total sales. By February 2011, this figure had increased to 36 percent of total sales, which is the highest percentage in two years.