Data provider CoreLogic released their home price index yesterday, and found that on average home prices declined by 1.5 percent in the United States in August 2010 compared to August 2009 (including the sales of distressed homes). On average, home prices are down a whopping 28 percent since the market peak in 2006.
Some interesting highlights regarding individual markets, quoted from the report:
- The top five states with the highest appreciation, including distressed sales, were: Maine (+5.8 percent), New York (+3.7 percent), Connecticut (+2.5 percent), Virginia (+2.4 percent), and South Dakota (+2.1 percent).
- The top five states with the greatest depreciations, including distressed sales, were Idaho (-14.0 percent), Alabama (-10.4 percent), Utah (-7.3 percent), Oregon (-6.3 percent), and Florida (-6.2 percent).
According to Mark Fleming, chief economist for CoreLogic “price declines are geographically expanding as 78 out of the 100 largest metropolitan areas are experiencing declines, up from 58 just one month ago“.
This dovetails with a report from Clear Capital last week that said that home prices declined 6 percent over the past two months (the Clear Capital report is a three month rolling average that is updated daily, and is the most current of the three major home price indices the other two being the CoreLogic report noted above, and the S&P Case Shiller report, which I will have more on later today). Clear Capital said the decline was “sudden and dramatic“.
Downward pressure on home values will persist as long as we have a situation where there is a huge supply of homes and little demand for them. There is still a 10.7 month supply of homes on the market, compared to about 6 months worth in a normal market. There are also millions of homes in shadow inventory that have yet to hit the market. Expect home prices to continue to decline in many markets in the near term, barring significant changes to the economic outlook.
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