Home prices declined on a year-over-year basis by 11.6% and 10.1% in July and August, respectively, according to a new house price index compiled by First American CoreLogic
Excluding distressed sales, year-over-year prices declined 6.8% in July and 6.2% in August.
Despite the year-over-year declines, the index has continued to show increased home prices on a month-over-month basis since March, although First American CoreLogic said some of the increases may be contributed to seasonal patterns.
The new index is calculated from a revised methodology and is drawn from an expanded transaction database. New features also include the ability to differentiate the difference in distressed and non-distressed sales and a 12-month forecast.
The new forecast projects price declines will continue throughout the remainder of 2009 before hitting bottom in March 2010, based primarily on the impending expiration of the first-time homebuyer tax credit and the potential shadow inventory of foreclosed homes expected to hit the market soon.
“While the tax credit has given a short-term boost to both home sales and volume, its termination, combined with projected increases in foreclosure inventories, will place additional downward pressure on house prices this winter,” First American CoreLogic said.
By spring 2010, the national housing market should experience positive appreciation, the real estate metric firm said. Cumulative peak-to-through declines are expected to be 37% by March 2010. By August 2010, First American CoreLogic projects 12-month appreciation for national home prices will be 4.6% and that California and Florida, two states hit hardest by the housing downturn, will see gains in excess of 7%.
The five worst states in terms of annual depreciation, including distressed sales were Nevada (24.4%), Arizona (19.5%), Florida (16.8%), California (12.9%) and Oregon (12.5%). Excluding distressed sales, the worst performing states were Nevada (19.8%), Florida (14.9%), Arizona (14.8%), Idaho (10.6%), and Washington (10.5%).
Write to Austin Kilgore