Home Price Declines Aren’t Getting Worse: Report

While national price declines continue, nominal price drops have somewhat stabilized, according to June housing price data released by First American CoreLogic this week. Of course, that stabilization still means double-digit depreciation on a national level year-over-year; but there is at least some emerging evidence that at least the rate of decline has leveled off. “As of June, nominal home prices declined 10.7% from a year ago,” said Mark Fleming, chief economist for First American CoreLogic. “Given our home price expectations for the remainder of this year, we expect 2.7 million pre-foreclosure and foreclosure filings in 2008, up nearly 50% from 2007.” Nominal home price declines have stabilized in the 10 to 11 percent range for several months, he said, although inflation-adjusted real returns are declining at a faster rate. Between April and June, home price declines have fallen by an annualized average of 10.8 percent — but real home price declines accelerated from April’s 15.3 percent to June’s 16.8 percent. An early look at CoreLogic’s preliminary July price data suggests more of the same; although the 1-month HPI posted its first monthly negative return since March (-0.6 percent), the 12-month HPI posted a 10.49 nominal percent drop — the sixth straight month in the 10 to 11 percent range. Evidence of a more-steady price decline didn’t surprise most of HW’s sources, who said they expected home prices to continue to decline. “Home prices take years to stabilize in a down cycle, but seeing the rate of decrease slow after a year and a half is about in line with what I’d expect,” said one executive, a senior executive at a commerical bank that asked not to be identified in this story. A review of First American CoreLogic’s state-level and core-based statistical area pricing trends by HousingWire shows that while double digit and even month-to-month depreciation continues, the rate of decline is clearly ebbing as of late. In the past three months through July, 638 of the 958 CBSAs tracked by the firm held flat in terms of pricing; the moderating trend is even more pronounced when comparing June to July, where 883 CSBAs registered no change in pricing between the two months. The nation’s worst-performing counties continue to be centered in hard-hit California, CoreLogic’s data show: Sacramento County has seen prices fall 26.12 percent from June of last year, while Santa Barbara County has seen prices fall 25.54 percent; San Bernardino, 25.41 percent. In the past three months, San Bernardino has seen prices fall 7.46 percent, the second worst such showing nationwide (the worst performer was Calif.’s Sutter County, which saw a 7.87 price decline). Which means that we’re facing a good news/bad news scenario for housing prices, one that’s likely to continue for some time: price declines aren’t getting worse each month, but they are still declining.