Home prices in 25 metro markets tracked by analytics firm RadarLogic
in its RPX Composite index declined by 3.8% in 2010, the firm reported.
Stability in home prices during the beginning of 2010 was attributed to stimulus of the housing market that came via the government's homebuyer tax credits, low-down-payment Federal Housing Administration
loans, and the Federal Reserve
's purchase of $1.25 trillion in mortgage-backed securities and $175 billion of housing agency debt, which helped keep mortgage rates near record lows.
When the stimulus ended mid-year, weakness returned to housing markets.
On a month-over-month basis, the RPX Composite price performed worse than its 10-year average in 10 of 12 months in 2010. On a year-over-year basis, the performance of the RPX Composite price through Dec. 31 was worse in 2010 than in any other year save for the bust years of 2007 and 2008.
The RPX Composite prices for the Midwest, West and South in 2010 each declined in excess of 5% from one year earlier. The RPX Composite price for the Northeast outperformed the prices for the other regions, declining just 1.5%. The Northeast price is heavily influenced by housing market dynamics in the New York metropolitan area, where home prices fared better than most other parts of the country.
The rapid decline in the RPX Composite transaction count during July reflects waning demand after the June 30 contract signing deadline for the homebuyer tax credits. This contributed to a large year-over-year gain in transactions during 2009, then the termination of the credits contributed to a large year-over-year decline in 2010.
The discount in prices from the sale of real-estate owned homes relative to prices in other sales increased rapidly from 8% in July 2006 to 41% in August 2008. The discount narrowed to 33% in September 2008, but started widening again when other prices stabilized in early 2009. The discount remained relatively constant during 2010, ending the year at 40%.
In 2010, REO sales increased from 26% to 31% of total sales throughout the 25 metropolitan areas tracked by Radar Logic. Twenty-two of the metropolitan areas exhibited a year-over-year gain in REO sales’ share of total sales.
The RPX Composite price declined 1.6% from Nov. 16, 2010 to Dec. 16, 2010, after declining only 0.3% from the beginning of October to Nov. 16. The only time the RPX Composite price has declined more from November to December was during the housing bust of 2007 and 2008.
As of Dec. 31, RPX prices for 20 of the 25 metropolitan areas had declined between 25% and 60% from their peaks with Las Vegas seeing the biggest decline at 61.8%.
Write to Kerry Curry
Follow her on Twitter @communicatorKLC