Home prices stabilized in the second half of 2011 and will rise somewhat in 2012, but should remain near levels not seen since 2001, according to Clear Capital.
The housing data provider reported home prices fell 2.1% in 2011, partly because of decreasing real estate-owned saturation. It projects prices will inch up 0.2% this year.
In October 2011, Clear Capital predicted home prices would drop 3.2% by March 31.
The 2012 estimate of a 2.1% decline marks the smallest annual change in either direction since the market gained 1.7% in 2006, the company noted. The majority of the downturn occurred through May, with upticks during the summer-buying season and stable prices through the fall and early winter.
Clear Capital predicts a flat 2012 U.S. housing market with only 40% of individual markets stable.
“Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Alex Villacorta, director of research and analytics at Clear Capital. “Although the national numbers suggest markets are flat, when looking at individual metro markets it turns out only 24% of them showed signs of stabilization in 2011, while the others are still moving more dramatically higher or lower.”
Villacorta said the lower segments of appreciating markets are driving much of the current price growth. In places like Florida, which have been hit hard by the downturn, Clear Capital sees considerable activity in lower-end properties as demand continues to heat up.
Regional trends revealed a bit more price variability. The Northeast’s meager 0.1% yearly gain led the nation, comparing favorably to the drops of 1.3% in the South, 3% in the Midwest and 4.4% in the West.
There were notable extremes at the positive and negative sides of the housing market. Four metro areas posted price declines greater than 10%, with Atlanta leading the way down 18.3% followed by Seattle at 15.1%. Home prices in Birmingham, Ala., and Detroit also fell considerably down 11.1% and 10.8%, respectively.
Each of the markets with double-digit declines saw an increase in the percentage of sales that were REOs through the year, according to Clear Capital.
On the other hand, Dayton, Ohio, enjoyed 11.5% price growth in 2011, followed by Orlando, Fla., with a gain of 6.7% and Miami with 5.6% appreciation.
“Just as increasing REO saturation affected our worst performers, decreasing REO saturation for these three markets in 2011 (Dayton, Ohio, down 12.3%, Orlando, Fla., down 21% and Miami down 9.9%) appeared to buoy their home prices for the year,” Clear Capital reported.
Write to Justin T. Hilley.
Follow him on Twitter @JustinHilley.
