Home Price Perspectives Warped by Tax Credit: CoreLogic

Yet anotherrnstudy has been released which indicates home prices are trending lower.  CoreLogic’s March Home Price Index (HPI) pegsrnthat decline at 7.5 percent in March compared to the HPI in March 2010.  March was the 8th straight monthrnwhen the HPI was lower than it was during the same period a year earlier.  </p

“Last year the First Time Homebuyer Tax Credit pulled a significant number of sales forward and, to an extent, artificially supported prices. So, absent the tax credit, it is understandable that we see prices continue to decline when compared with last year,” said Mark Fleming, chief economist with CoreLogic. “As we move further away from that support, we will see a leveling of prices and eventually organic improvements in the market.”</p

ThernCoreLogic HPI is a repeat-sales index that tracks increases and decreases inrnsales prices for the same set of homes over-time. rnThe data includes distressed sales, both short sales and sales ofrnbank-owned real estate. The declinernin home prices is not nearly so dramatic, however, when those distressed salesrnare eliminated from the mix.  Excludingrnthose sales, the HPI for March is down 0.96 percent year-over-year.  The total HPI figure in February had declinedrn5.8 percent from the previous year but, again, when distressed sales werernremoved the change was only -2.0 percent.</p

The same isrntrue across the states.  Without shortrnand REO sales included in the data, 19 states experienced actual increases inrnMarch.  The five states with the highestrnappreciation based on the total HPI were West Virginia (+7.7 percent), NorthrnDakota (+4.1 percent), New York (+3.5 percent), Alaska (+2.4 percent) and Mainern(+0.4 percent.)  When distressed salesrnare excluded the highest appreciation occurred in West Virginia (+11.5rnpercent), New York (+4.5 percent), Mississippi (+4.4 percent), North Dakotarn(+4.1 percent) and Alaska (+4.0 percent.)</p

On the otherrnend of the scale, those states with the greatest depreciation includingrndistressed sales were Idaho (-13.3 percent), Arizona (-12.3 percent), Michiganrn(11.9 percent), Florida (-0.6 percent) and Illinois (-10.6 percent).  When distressed sales are eliminated there isrna pronounced shift; Nevada (-8.9 percent), Idaho (-8.8 percent), Arizona (-6.6rnpercent), Maine (-6.6 percent) and Minnesota (-5 percent).  One must assume there was an anomaly in Mainernprobably related to sample size that allowed it to rank among the highestrnstates in both appreciation and depreciation.</p

The nationalrnHPI has depreciated 34.8 percent since the peak in April 2006.  When distressed sales are excluded from therndata the drop is 22.5 percent.</p

Among therntop 100 Core Based Statistical Areas (out of 592 covering 86 percent of thernU.S. population) 92 declined between March 2010 and March 2011.  A year-over-year drop was recorded by only 85rnof the areas in February.

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