March home prices in the West declined 4.3% from the previous three months and reached a new low since 2001, according to real estate data provider Clear Capital
Nationally, home prices fell 1.3% over the same period, but the firm's director of research and analytics Alex Villacorta tried to quell fears of further declines across the country.
"The latest data through March supports our view that many markets are continuing to see relief from the significant price declines we observed through January," Villacorta said. "While some markets are already in double dip territory, specifically in the West, widespread fear of a collective fall in market prices is overstated."
One of those voices is Brian Norton, a large REO investor with Arch Bay Capital
. At the Source Media Mortgage Servicing Conference in Dallas Wednesday, he said prices shouldn't reach a bottom until the early part of 2012.
"We have some distance to go down nationally, Florida significantly. By early next year we should finally be at the bottom," Norton said, adding that in some places like Miami, Las Vegas and Phoenix it is cheaper to own than to rent.
Analysts at CoreLogic (CLGX)
said Thursday as well that although home prices have fallen over the past several months, the market is showing signs of stabilization.
Villacorta said the West has experienced such a painful fall because of the level of REO, or REO saturation as he calls it, remains so much higher there than anywhere else in the country.
"Looking deeper at the disparity between the West and the other regions, we find that the rate of change in REO saturation continues to serve as a leading indicator of home prices," Villacorta said. "For example, out of all the regions, only the West showed acceleration in its REO saturation from the previous quarter."
Joe Murin, chairman of the financial advisory firm the Collingwood Group
, said home prices will continue to see deterioration as foreclosure levels remain elevated through 2011. Murin said lawmakers should understand that overstepping on upcoming mortgage finance reforms could thwart even the slightest recovery.
"We can’t allow ourselves to get sideways with housing policy just because we went through a difficult period of greedy mismanagement," Murin said. "Rather than simply overreact and risk stymieing housing recovery, we need to establish a practical plan toward enjoying the fruits of housing without the risks that caused our last major crisis."
Prices in the South and the Midwest remained flat from the previous three months, according to Clear Capital, with only the Northeast seeing a 0.5% loss. But Clear Capital warned of the double-dip momentum out West last month
"The West region broke through its prior 2009 low point, becoming the first region to double dip," Clear Capital said. "This places home prices in the West at their lowest point since 2001 and reflects the continuing price declines among most key markets in this region. This underperformance in home prices reflects the extent distressed activity plays in western markets."
Write to Jon Prior
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