IAS Price Index Dips on Declines in Northeast, Midwest
The Integrated Asset Services (IAS) index of national house shows prices fell 0.3% in November, the collateral valuation and management services firm said. That's better than the 0.5% decline in prices the index experienced in October and the 0.6% decrease in September. The IAS360 House Price Index (HPI) is a county-level measure of median sales price of single-family residences in five US Census Bureau regions, nine Census divisions and 360 counties. The firm said the index was at the same level in November 2009 as it was at the beginning of 2009. However, results were mixed across the country. The South experienced the 2.3% increase in prices in November, due primarily to slowed losses in Florida, which declined only fractionally, but is still recovering from a 45% decline from its peak in June 2006. The West’s 0.5% price increase was the only other region to experience a price improvement. The Northeast region declined 1.8%, as certain key markets like Westchester County, NY, Morris County, NJ, and Frederick County, Md. all experienced declines of nearly 5%. The Midwest experienced a 1.7% decline as well. “Given the weak labor market and the tight credit environment, it’s not surprising to see some weakening in prices through these winter months,” said IAS president and CEO Dave McCarthy. “Even in the best of economies, the winter season is associated with fewer home sales and increased days on market. And these are hardly the best of economies.” High unemployment and the nation’s substantial real estate owned (REO) inventory are putting downward pressure on prices, IAS said. An increase in mortgage rates could also hurt sales and prices, the firm added. “Despite the extent of the declines to date, the risk of renewed weakening in house price still looms large,” McCarthy said. “The potential for another wave of distressed properties coming to market, from both private sellers and banks, remains very high.” Write to Austin Kilgore.