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US Real Estate Prices Continue to Tumble

By Mike WheatleyMarch 03, 2011

  • According to the Core Logic Home Price Index, newly released figures for January 2011 show that the prices for US residential homes fell for the sixth month in a row, and are now worth 5.7% less than they were this time last year.

    The fall seems to be linked to the high number of foreclosures affecting the market, as well as a weak demand. Negative equity is just one of a number of obstacles in the way of market recovery at this time.

    January residential home sales figures
    Courtesy of CalculatedRiskBlog

    Despite this disappointing news, Mark Fleming, chief economist for Core Logic, said that he hopes a renewed demand in the spring will be able to curtail the downward spiral.

    Core Logic’s figures take into account the 20 markets of the Standard & Poor’s/Case Shiller index. 18 of these markets saw residential property prices drop in the first month of 2011. The largest declines were in the Detroit metropolitan area, at 13%.
    The worst performing states include Alabama, with prices dropping by 12.1% and Arizona which saw a decline of 11%.

    However, it wasn’t all doom and gloom, as several states did see an increase in residential property prices. West Virginia (5.5%), North Dakota (3.3%) and New York (1.9%) all saw increases in the cost of an average residential home.

    Core Logic

    Another piece of good news is that foreclosure activity, while still quite high, is slowing down, at least according to Foreclosure Radar’s latest figures. Their latest report showed that the number of foreclosure sales to banks dropped by 48.4% in February from January's level, while foreclosure sales to third parties also dropped, by 35.3%.

    It’s hoped that the decrease in the number of foreclosures will continue. Combined with the expected increased activity as the spring buying season swings into action, industry observers are indeed anticipating a recovery of sorts and an end to the decline in residential housing prices.

    3 comments on “US Real Estate Prices Continue to Tumble”

    1. "Despite this disappointing news, ..."

      "However, it wasn’t all doom and gloom, as several states did see an increase in residential property prices..."

      I am really sick of higher home prices being reported as "good news", and lower home prices being reported as "bad news".

      Some of us would like to buy homes, but in our areas they're still far too expensive. Lower home prices are GOOD news.

      1. @Mark, I think we are with you on the relativity of prices. The way the news is taken in context to the relative market strength, sort of takes the consumer out of the equation. Which is pretty dumb isn't it? Those pesky economists caused all this with their confounded supply and demand stuff. 🙂 Thanks for your input man - a lot.

        Always,
        Phil Butler
        Editor RealtyBizNews

    2. Over the life of a 30 year loan, a $300 per month decrease would equal over $100K in savings. Search the web for "Mortgage Refinance 123" website they helped me find 3.118% rate easily. Strongly recommend them for anyone. Good luck.

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