According to data from CoreLogic’s most recent Home Price Index, home values were down 6.7 percent from February 2010 to February 2011. Declines are accelerating, as the January 2010 to January 2011 decline was 5.5 percent. Prices on non-distressed properties appear to be stabilizing to a degree, as they were down 0.1 percent (year-over-year) for February, and 1.4 percent (year-over-year) in January. Mark Fleming, chief economist at CoreLogic commented:
“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets. Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”
This would be great, except for the fact that distressed sales comprise a huge chunk of the market, and there are millions of unsold homes in shadow inventory that have yet to hit the market. Furthermore, many expect to see the pace of foreclosures increase in 2011. Distressed properties also tend to drag down the values of neighboring, non-distressed properties.
This is the seventh consecutive month that home prices are down according to CoreLogic, and it does not appear that we have hit bottom yet (at least in most markets). The overwhelming excess supply of homes and the tepid demand for them will continue to weigh on prices for a while to come.
Despite the declines, some states did see some appreciation in home values, West Virginia (+5.4%), New York (+4.7%), North Dakota (+4.1%), Maine (+3.6%), and Alaska (+1.2%) were the biggest gainers. The biggest losers were Idaho (-14.6%), Arizona (-12.0%), Florida (-11.2%), Michigan (-11.1%), and Illinois (-11.1%).
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