Posted on Thursday, November 11, 2010
Residential property values fell 0.2 percent at the national level during the third quarter of this year, according to Integrated Asset Services (IAS). In front of a
seasonal slow-down in home sales, IAS says the data foreshadow “particularly difficult times ahead” for the country’s housing markets and for the U.S. economy overall.
The IAS360 House Price Index released Tuesday shows that only the Northeast region of the country reported positive movement for the quarter, with home prices up 1.6 percent. IAS says the increase there was mostly due to isolated gains in New York and Washington, D.C.
In the Midwest, home prices plunged 1.4 percent. The West, despite occasional pickups in California, saw prices drop 0.5 percent in Q3, while the index for the South fell 0.4 percent.
IAS360 HPI data show the West, which in addition to California includes the nation’s hardest-hit metro area of Las Vegas, is now down 27.6 percent from its peak. According to IAS, the West is “far and away the poorest performing census region in the country.”
The IAS report also confirms that the nation’s most devastated counties, several of which have seen home prices fall by more than 50 percent over the last three years, are showing no signs of bottoming.
Among the worst, Monterey County in California, now down 41 percent over just the last year, fell another 3.8 percent in Q3. Lee County in Florida is off some 39 percent since the third quarter of 2009, and home prices there dropped another 4.3 percent in IAS’ latest report.
“Our granular data have been telling us all along that the housing crisis is not over,” said Ryan Tomazin, president of the Denver-based Integrated Asset Services. “The worst may be behind us, but I have to think this combination of slowing home sales in the middle of a generally weak economy will make it very difficult for the market to recover any time soon.”
On top of the effects of adverse market dynamics, investigations into the so-called robo-signing controversy initiated by federal officials as well as state attorneys general are casting another cloud over the housing market.
There are concerns that these investigations could slow the housing market correction as banks hold back foreclosures. IAS says fewer foreclosures mean the supply of those homes for sale goes down and investors will be more reluctant to buy them.
Top U.S. officials, meanwhile, including the head of the FDIC, are openly acknowledging the damage the recent problems with foreclosure paperwork could unleash on the country’s housing market and on its banking system.
There are outward fears that mortgage lenders will face even greater losses if servicers’ documentation errors and foreclosure suspensions cause the backlog of distressed properties to swell further, putting even more downward pressure on home prices.
Industry estimates of homes currently in near-term danger of foreclosure range between three and 11 million properties. Nearly a million homes are expected to be re-possessed this year.
“It’s clear the housing market still faces many problems, not least of which the potentially disastrous number of foreclosures that may occur over the coming years,” Tomazin said. “For any number of reasons, the housing market is very fragile to say the least.”
By: Carrie Bay DSNews.com