House prices heading to a new low at end of 2010: Radar Logic
House prices held a very slight decline in July, possibly a marked transition toward a new trough at the end of 2010 or the start of 2011, according to Radar Logic, an analytics firm based in New York. Quinn Eddins, director of research at Radar Logic, told HousingWire prices will follow the declining trends in demand for house purchases. In July, the National Association of Realtors reported a 27% drop in sales activity, which then rebound in August 7.6%. But the last time prices were as flat as they were from June to July, was in 2006, at the height of the housing peak. From there, rapid price growth transitioned into rapid price decline. Radar Logic anticipates the Standard & Poor's/Case-Shiller Home Price Index to remain at the same level in July that it reached in June. A large inventory of homes continues to contribute to the lack of demand, according to Radar Logic. Most of it has been REO. The sale of foreclosed homes and those sold at country foreclosure auctions increased to almost 25% of total transactions. "The trend suggests buyers are focused on distressed assets, undoubtedly as a result of steep relative discounts," according to the report. Eddins said how these lenders and financial institutions manage the amount of REO hitting the market will determine the trend in prices. If those companies flood the market, prices would have a huge decline that would probably outweigh the shortened timeline of a flattened, more drawn-out recovery if those companies kept the REO flow to a trickle, Quinn said. Write to Jon Prior.