(2/8/2012) - With the Midwest hardest hit by the housing crisis, home value declines elsewhere appear to be easing. The Northeast appears nearest to bottoming out.
Nationwide home prices declined 2.6 percent in January, compared to a year ago, but dropped only 1.6 percent over the last quarter and less, 1 percent over the past six months, according to Clear Capital's Home Data Index (HDI) Market Report.
Clear Capital recently forecast prices nationwide could begin to rise next year. Continued stabilization will produce a slight gain of 0.2 percent in home prices across all markets, remaining near levels not seen since back in 2001.
"Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years," said Dr. Alex Villacorta, director of research and analytics at Clear Capital.
"With national prices down a little more than two percent for the year and sitting at their lowest point since 2001, our projections show that the current balance the market has found will continue through 2012," he added.
• The Midwest, still heavy with foreclosures, fared worst among the regional housing markets, with home prices falling 5.2 percent over the year, 4 percent for the quarter and 2.1 percent over the past six months.
Clear Capital said the Midwest saw the largest regional change due, in part, to a 1.5 percent uptick in REO saturation over the past quarter.
"Looking at the latest data through January, home prices remained relatively unchanged with the exception of the Midwest," said Villacorta.
• By the numbers, the Northeast appeared ready to bottom out with year-over-year home prices falling a mere 0.1 percent, 0.7 percent for the quarter and 0.2 percent over the past six months.
The report for the Northeast, if sustained, effectively debunks some reports that forecast home prices won't recover until 2020.
The Northeast's home values dropped 22.5 percent since the height of the market in 2006, better than the national average of more than 40 percent.
• The South was in better shape than the West with a 1.8 percent drop in prices over the year, but only a 0.9 percent fall for both the quarter-to-quarter numbers and the six-month period.
• Though not as bad as the Midwest, the West struggled with a 3.5 percent home price decline for the year, but only 0.9 percent quarter-to-quarter and 1.1 percent for the six-month period.
Clear Capital said the West reduced its year-over-year losses by nearly a full percent, compared to December, due in part to a decrease in REO sales from 38 percent in the first quarter of 2011, to 31 percent today.
"Although prices at the national level continue to slide due to pressure from the Midwest, the lower priced segments of several specific markets are bucking the trend and seeing appreciation, suggesting that recoveries could be occurring from the bottom up," Villacorta added.
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