Home Price Declines in U.S. continue to improve

Dennis Norman

Home prices in the U.S. fell 9.2% in May compared to a year ago according to newly released data from First American CoreLogic and its Loan Performance Home Price Index (HPI).  This drop represents the smallest year-over-year decline since December 2007. 

• The rate of national price declines for residential single-family detached homes peaked at 11.9% in January 2009 and has since improved by over 2.5 percentage points through May.  The June preview data suggests further improvements int eh rate of decline.
• Since U.S. home prices peaked in July 2006, national home prices have declined 20.1% on a cumulative basis
• Despite the improvement in the national trend, the geographic breadth of price declines has not improved.  Forty-one states experienced price declines, and 16 states had double-digit declines in May, well above the number of states experiencing declines a year ago (Further proof that all real estate is LOCAL!)
• Nevada (-26.1%) remained the top-ranked state for annual price depreciation with Florida (-25.5%) close behind.  California’s (-19.8%) price trends continued to improve in May and is currently more than 10 percentage points better than the peak decline of 30.3% set in August 2008.  Arizona (-18.1%) and Illinois (-16.9%) round out the top five states for price declines.  Florida and Illinois are the only two states that are not currently showing signs of moderation or improvement in the declines among states experiencing the largest price decreases

This data supports my feeling I’ve expressed over the past couple of months that perhaps we are flirting with the “bottom” of the market.  Again, I have to add some CYA…this is subject to change in a heart beat….any unexpected negative change in the economy could send the real estate market heading south again….time will tell…

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