Clear Capital (www.clearcapital.com) released its monthly Home Data Index (HDI) Market Report, providing a granular analysis of how local markets performed compared to the national downward trend in home prices through November 2010.
A -5.8 percent price change this month marks the third consecutive monthly report of national quarterly home price declines. With the price bubble created by the tax credits fully deflated, markets are affected by traditional economic conditions such as supply and demand, and the typically slower winter buying season. National prices remain 5.5 percent above the record lows of early 2009, but with an increasing number of local markets double dipping (setting new record lows) downward price pressure remains despite the slowing of declines for top performing areas.
The Midwest region continued its decline, dropping another 1.2 percentage points from last month’s report to a -9.9 percent quarterly price change. The Columbus, OH and Milwaukee, WI micro markets lead the Midwest downward with -15.3 and -14.6 percent quarterly price changes respectively. The South region, which includes the underperforming Florida markets, has edged closer to new record lows. With prices only 2.3 percent above their 2009 levels and a quarter-over-quarter price change of -4.8 percent, the South region is getting closer to breaking through the double dip threshold.
“It’s encouraging that the immediate and dramatic decline in prices that we observed since mid August appears to be softening,” says Dr. Alex Villacorta, Senior Statistician, Clear Capital. “But any optimism should be tempered by the fact that November’s numbers show continued significant downward pressure for home prices. Nationally, prices are six percent above double dip territory, but are down eight percent since the momentum from the tax credit ended.”
A glimmer of good news: the -5.8 percent quarterly price change for the nation is only 0.8 percentage points lower than last month’s report. Compared to a downward jump of 4.8 percentage points the month prior, this 0.8 point drop indicates the worst of this downward turn might have passed. Price trends from recent years indicate, however, winter price lows hang around through March, making it unlikely that there will be an end to these declines that started in August, until the second quarter of 2011 at the earliest.
Download the entire analysis from Clear Capital.