February 7, 2011 (Shirley Allen)
Clear Capital has reported in its monthly Home Data Index (HDI) Market Report that home prices increased 0.9 percent during the first three weeks of January, the first gains in home prices since August 2010. On a quarterly basis, prices were down 1.6 percent for the last three months, a slower decline than the 5.8 percent reported for the quarter ending in November.
Alex Villacorta, Clear Capital senior statistician, said the price increase was the first seen in the monthly survey since the economic downturn began that was not influenced by some form of government incentive program.
“This uptick is the first non-incentivized change in prices we’ve seen since the downturn began, and could provide great opportunity for buyers, sellers and investors alike. Although many markets still remain under significant downward pressure in light of increased distressed sale activities, it is clear that the severity of the downturns observed in October and November have subsided,” Villacorta said.
However, the report also observed that the price increase may be due to the temporary moratorium on foreclosure activity imposed by some of the nation’s largest lenders in the wake of the robo-signing controversy. As lenders begin to resume foreclosure sales, the large amount of distressed properties expected to hit the market could exert considerable downward pressure on housing prices again.
The latest data from the widely respected S&P/Case Shiller Home Price Index predicted a continuing decline in home prices with many analysts expecting a “double-dip” decline in future home values.
Clear Capital’s HDI report is based on more recent housing data whereas most of the other pricing surveys lag one or two months behind.
Clear Capital considers the price change to be especially meaningful as the first months of the year are typically affected by the seasonal slowdown in sales activity.
“This recent national change in price direction is encouraging for the overall housing sector, yet it is still too early to determine whether this current uptick in home prices is a temporary reprieve or the start of a sustained recovery,” Villacorta added.
Tag: housing prices, price increase, distressed properties, clear capital, seasonal slowdown, robo-signing controversy