Posted on Wednesday, December 8, 2010
Recently released information from Radar Logic Incorporated claims home prices experienced a much sharper decline than the decline shown in other companies’ reports.
Radar Logic’s September 2010 RPX Monthly Housing Market Report released on Thursday shows the composite price experienced a 2.7 percent decline from August to September, and also shows a year-over-year decline of 1.9 percent.
This data is a dramatic difference from the 0.7 percent monthly decline and 0.6 percent year-over-year decline that was published earlier in the week in Standard & Poor’s report on the S&P Case-Shiller home price index for the same month.
Radar Logic asserts that its data, which is compiled from measurements of 25 metropolitan statistical areas (MSAs),
shows that the housing market is weaker than it might appear.
According to Radar Logic, when examining the prices of sales from “not motivated” sellers, the state of the U.S. housing market looks even bleaker.
Radar Logic describes “motivated” sales as sales from financial institutions like lenders, servicers, and financial institutions. “Not motivated” sales are sales by owner-occupants.
The 25-MSA RPX report shows not motivated sales declining more than twice as much as motivated sales, both month-to-month and year over year.
The company says these declines in not motivated sales can be attributed to many things including seasonal factors such as the beginning of the school year, when owner-occupants might chose not to sell their homes in order to provide stability to their families.
Banks, according to Radar Logic, will not have the same deterrents when selling REO homes.
“Homes sold out of foreclosure represent a low-priced alternative to homes sold by owner-occupants,” said Quinn Eddins, director of research at the New York-based Radar Logic.
He continued, “When foreclosure sales increase as a share of total home sales, as they are now, owner-occupants face increased pressure to reduce prices in order to compete. If sales of foreclosed homes continue to show greater stability than sales of other homes, overall housing prices will continue to deteriorate.
By: Joy Leopold DSNews.com