Current Issue
House prices declined 0.2% from July to August, the second month of declines after a fourth-month-long rally that brought a 2.8% increase earlier this year, reported Integrated Asset Services (IAS).
The last time national home prices were at the August 2009 level was in February 2005, and prices in August this year were 8% lower than the prices in August 2008, the default management and residential collateral valuation service provider said.
Price increases of 0.7% each in the Midwest and Northeast were tempered by declines in the South and West of 0.1% and 1.2%, respectively.
Prices in two counties, San Joaquin County, Calif. and Lee County, Fla., which were already down 50% from their peak, declined another 7% each in August. New York City and San Diego both posted month-over-month increases of 1.3% each.
“Ordinarily, there’s nothing ominous about a slowdown at the end of summer,” said Dave McCarthy, IAS president and CEO. “But these are hardly ordinary times. We know there’s a sizable inventory of bank-owned homes out there that will be listed at some point, and that could ignite a new wave of stress in the housing market.”
McCarthy said a “shadow inventory” of foreclosed homes that aren’t listed and are unsold has the potential to hurt housing recovery.
“When the shadow supply hits the market, home prices will be pressured, particularly in markets with large numbers of foreclosures,” he said.
The IAS index includes Fannie Mae (FNM: 0.9878 -0.22%) and Freddie Mac (FRE: 1.175 +1.29%)-backed transactions, and Veterans Administration (VA) and Federal Housing Administration (FHA)-insured transactions in 360 counties, nine census divisions, four regions, and the nation average.
Write to Austin Kilgore.
