Posted on Thursday, March 17, 2011
New data from Clear Capital indicates that the slow-down in foreclosure activity may be having a positive effect on property values in some parts of the country.
However the company’s report states that despite a national trend toward flattening of home prices, the western United States is dragging down encouraging developments in other regions.
Home prices in the West fell 4.5 percent over the three-month period ending in February when compared to the previous three months. Based on Clear Capital’s study, eight of the fifteen lowest performing markets are from the western part of the country.
Driven by heavily distressed markets in Arizona and Nevada, Clear Capital says the West region is expected to set new double dip price lows as early as next month if the trend continues.
The company notes that home prices in Tucson, Arizona are down 13.4 percent from a year ago, and more than half the homes sold in Las Vegas these days are REOs.
In contrast, home prices in the South region remained flat, with absolutely no change between the two subsequent three-month periods ending in February. In the Northeast, prices rose 0.3 percent during the rolling quarter timeframe. The Midwest did record a drop (-1.6 percent) but much narrower than the West saw.
Looking at the broader national picture, Clear Capital recorded a 1.4 percent decline in home prices over the three-month period ending in February when compared to the previous three months, primarily due to the depreciation in the West.
Home prices nationally have appreciated 4.2 percent since the cycle lows set in early 2009, and Clear Capital says it’s seen considerable moderation in the declines recorded in recent months.
The firm’s analysts say lenders now have a better understanding of distressed pricing and marketing, as well as the damaging effects of flooding the market with distressed inventory.
“[C]urrent trends are continuing to show a softening of price declines,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “The 3.9 percent quarterly decline we observed in December has given way to moderating declines with the national price index now down only 1.4 percent, suggesting a leveling of prices is on track for spring.”
By: Carrie Bay DS NEWS