US residential property prices are stable
Residential property prices in the US appear to be stabilising and were down less than 1% in January compared to the same time a year before, according to latest index to be published.
The 0.7% year-over-year decline in January was better than the 3.4% decrease in December, the latest monthly Home Price Index from First American CoreLogic shows.
Excluding distressed sales, prices declined 0.4% year-over-year in January, CoreLogic said, a considerable improvement from the 3.3% in December 2009.
CoreLogic now projects that house prices will continue to decline another 3.7% into the spring before bottoming out in April. After prices begin to stabilize, there will be a modest recovery for the rest of 2010. Excluding distressed sales, prices are projected to decrease only another 0.9%.
But recovery will be slow, it predicts. ‘The cumulative loss in home prices of 28% is more severe than the next worst housing recession of 24% cumulative decline which began in Louisiana in the mid-1980s,’ said First American CoreLogic chief economist Mark Fleming. ‘It took Louisiana five years to recover from the bottom, we expect this recovery to take at least as long,’ he added.
Michigan, Oregon, Nevada, Maryland and Arizona are expected to see the largest future price declines for the rest of 2010, ranging from 3.5% to 4.5%. On the opposite end of the spectrum, Alabama, South Dakota and Kansas are projected to see price appreciation ranging from 0.5% to 1.5% through to the end of 2010.
During the next 12 months, CoreLogic projects national property prices will increase 4.5%. Excluding distressed sales, that appreciation grows to 5.6%.
The index shows that Nevada experienced the worst year-over-year price decline in January at 16.9%, followed by Idaho, 12.9%, Florida 9.3%, Oregon 8.9% and Arizona 8.9%.
Excluding distressed sales, the worst five states for year-over-year price declines were Nevada at 15.1%, Idaho 9.4%, Florida 8.5%, Arizona 8.2% and Wyoming 6.8%.
Meanwhile the latest index from Altos Research shows that average listing prices for residential properties in 10 key cities in the US fell by 1.3% in February, the seventh month of price declines in a row. The report also shows that even though the listing time is generally decreasing, properties still tend to go unsold for the first 100 days of being listed.
The 10-city home price composite index which covers Boston, Chicago, New York, Los Angeles, San Diego, San Francisco, Miami, Las Vegas, Washington DC and Denver, was $479,781 in February 2010, up from the January 2009 bottom of $470,017, but down 5.75% from last year’s peak of $509,030 in July.
All of the 26 markets covered by Altos Research experienced a month-over-month listing price decrease, ranging from the smallest, a 0.2% decline in Miami, to a 4.4% decrease in San Francisco.