Distressed Sales Impact Home Prices

CoreLogic on Tuesday released an analysis of home price data through the end of March. The company reports that its home price index has posted year-over-year declines for eight months in a row now.

CoreLogic’s latest reading shows that home prices nationally fell 7.5 percent in March 2011 compared to March 2010 when distressed sales, including REO and short sale transactions, are factored into the equation.

The company’s report clearly demonstrates the extent to which pre- and post-foreclosure sales are weighing down overall market assessments. CoreLogic says if you take out the distressed factor, home prices are down just 0.96 percent from a year ago.

The National Association of Realtors reports that distressed homes accounted for 40 percent of existing-home sales during the month of March. The trade group says these properties generally sell at discounts in the vicinity of 20 percent.

Including distressed transactions, CoreLogic reports that the peak-to-current change in its national home price index (from April 2006 to March 2011) is -34.8 percent.

Of the 100 most-populated core-based statistical areas (CBSAs) in CoreLogic’s study, 92 showed year-over-year declines in March. That’s an increase over February when 85 of the top CBSAs were showing year-over-year declines.

Including distressed sales, the five states with the highest appreciation in March were: West Virginia (+7.7 percent), North Dakota (+4.1 percent), New York (+3.5 percent), Alaska (+2.4 percent), and Maine (+0.4 percent).

The five states with the greatest depreciation were: Idaho (-13.3 percent), Arizona (-12.3 percent), Michigan (-11.9 percent), Florida (-10.6 percent), and Illinois (-10.6 percent).

CoreLogic also revised its reading for February to reflect a 5.8 percent annual drop in home prices, as opposed to the 6.7 percent decline previously reported.

“National home prices have fallen 11.5 percent over the last nine months. Now the housing market is experiencing a double-dip,” commented James Frischling, president at NewOak Capital, referring to an earlier report from Clear Capital.

Frischling estimates that about one-third of all home sales nationwide during April were foreclosures.

“While declining home prices lead to an increase in foreclosures, it also contributes to more homeowners either walking away from their homes or living in them without making their payments,” Frischling added.

This article is from DSNews.com: “CoreLogic Data Illustrates Impact of Distressed Sales on Home Prices.”

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