Softer home price declines signal improvement: Clear Capital
Just one month after reporting a nationwide double-dip, Clear Capital said home prices are showing some improvement. Clear Capital's May Home Data Index found prices fell 2.3% last month compared to the three months prior. Prices fell 7.6% compared to the year earlier to the same level seen in 2000. While the news sounds dire, Clear Capital retained optimism about the prospect of price stabilization. "The softening of price declines suggests prices are stabilizing as the typically stronger summer buying season approaches," Clear Capital said. "Based on historical patterns, the non-REO segment increases its share of total sales volume in the spring and summer months." Prices dropped the most in the Midwest during May, down 4.9% compared to the previous three months, followed by the South with a 1.8% drop, the West, which was down 1.6%, and a 1% drop in the Northeast. Seven of the top 15 national markets witnessed price appreciation in May. The Washington-Northern Virginia area saw home prices climb 4.5% last month, while prices around St. Louis rose 2.2%. Other metropolitan statistical areas experiencing increases in home prices last month include Pittsburgh; New York; Virginia Beach, Va.; Miami, and central California. Prices fell the most in Detroit with a 13.2% decline in May compared to three months before. Prices are down 12.6% from a year earlier and about 58% of the housing inventory in Detroit is REO properties. Clear Capital said it is too soon to know if home sales will match historical averages. The real estate valuation firm does anticipate an increase of sales in the REO sector. According to the firm's data, the median price for a distressed property increased 5% in the fourth quarter. "This marks the longest gain in median price for REOs since the market correction began in 2006," Clear Capital said. "This is a positive signal at minimum. It indicates buyers' appetite for higher-end REO," which could lead to an increase in sale volume this season. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.