January Marked Eighteen Months of Declining Home Prices
Although many reports indicate the housing market is approaching a rebound, home prices still continue to fall. According to CoreLogic’s January Home Price Index, including distressed sales, January 2012 showed a 3.1 percent decline year-over-year and a decline of 1 percent compared to December 2011. Distressed sales include short sales and real estate owned (REO) transactions. The monthly decline in January added itself as the sixth consecutive month of declining home prices.
Unfortunately, this isn’t good news for people looking to sell their home and make a profit or at a minimum break even. On the other hand, this continues to be excellent news for the lucky people who have the funds available to buy homes at a bargain price. It isn’t guaranteed how long prices will continue to decline, but with interest rates at an all time low, now is definitely the time to take advantage of the market (if you can.)
Excluding distressed sales, year-over-year prices declined at a significantly less rate of 0.9 percent in January 2012. As a good sign for things to come in 2012, home prices excluding distressed sales actually rose 0.7 percent in January 2012 compared to December 2011. A gain of 0.7 percent may not seem like a lot, but let’s say a house was valued $300,000 in December 2011, a 0.7 rise would make the home now worth $302,100.
Mark Fleming, chief economist for CoreLogic, helped to put things into perspective by saying, “Although home price declines are slowly improving and not far from the bottom, home prices are down to nearly the same levels as 10 years ago,”
It’s interesting to note that:
The five states with the largest peak-to-current declines including distressed transactions are:
- Nevada (-60.1 %)
- Arizona (-50.8 %)
- Florida (-49.0 %)
- California (-43.6 %)
- Michigan (-43.2 %)
Including distressed sales, the five states with the highest appreciation were:
- South Dakota (+5.7 %)
- North Dakota (+4.0 %)
- West Virginia (+4.0 %)
- Montana (+3.6 %)
- Michigan (+3.0 %)
Including distressed sales, the five states with the greatest depreciation were:
- Illinois (-8.7 %)
- Nevada (-8.0 %)
- Delaware (-7.9 %)
- Alabama (-7.7 %)
- Georgia (-7.5 %)
This latest info definitely explains why real estate professionals have unique perspectives based on their market when it comes to whether or not home prices have hit rock bottom.
What do you see for the upcoming months? Do you feel home prices are going to continue to decline or start to increase in your area?