Home Prices Have Stopped And they have gained a slim 0.2 percent within every market while more and more discrete markets begin to stabilize in the following months.
Clear Capital, a data and solutions provider of real estate risk assessment and asset valuation for big financial service companies predicts that even though nation wide prices will remain flat, around 40 percent for the most active 50 market places it tracks will begin to stabilize during 2012.
Their Decline This Year
Clear Capital reported today activity decreased 2.1 percent during 2011 bolstered by a price stabilization in the last half of 2011 along with diminished saturation of REOs.
"Generally, 2011 was a somewhat quiet year for nation wide. home prices in comparison to the preceding five years," Dr. Alex Villacorta, Research and Analytics Director at Clear Capital said. "With nation wide prices down just over two percent for this year and hovering at their lowest position since 2001, projections indicate that the current market balance will continue during 2012.
"Although, reactions in individual markets for their local economics show a wide variety of performance levels," Dr. Villacorta added.
"Although the nation wide numbers indicate markets are very flat, when taking a look at particularized metro markets it appears that just 24 percent of these demonstrated any stabilization signs during 2011, while the other marketplaces continue to movie more dramatically lower or higher. The most interesting figures are that the lower portions of markets that are appreciating are responsible for driving a majority of the present price increases. In places such as Florida, which historically have been hot hard, we are now beginning to see quite a lot of activity in low-end homes as demand is heating up."
National. prices went down -0.4 percent during December looking at a quarter-compared-to-quarter basis, which shows the markets gave back a few of the increases for the summer buying period. It's actually the first cooling down period after six
consecutive monthly reports showing minimum quarterly increases. The fact is, the most recent
preceding six months of 2011 saw nation wide home prices were flat at just -0.1 percent.
While these nation wide quarterly numbers provided in December were slightly off, half of these major markets monitored saw quarterly gains. Dayton, OH was highest performer for the quarter with a 5.0% gain. On the low side, Atlanta, GA was consistently weak as lowest performing major marketplace in December with a -8.3 percent quarter-compared-quarter loss.
Added to the somewhat flat performance of home prices, nation wide saturation rates of REOs at the last part of 2011 were down to a new annual low of 24.8 percent. REO saturation was unstable early in 2011, while showing consistent decreases with increased stability toward the last portion of 2011.
On nation wide level, 2012 is predicted to continue much like the final portion of 2011, continuing with subtle price changes. A negligible decline in the first part of 2012 is
predicted to become a scant gain before year's end. At a more rough estimated, half of the highest 50 metro marketplaces are
predicted to have gains over the year, while individual metro marketplaces will experience a full array of price changes, from double-digit expansion to double-digit decreases.
Double digit unpredictability can be seen in the two strongest marketplaces, which includes Orlando with a strong 11.7 percent price increase, with Bakersfield a close second with a
predicted 11.1 percent escalation. The largest decreases are in Atlanta with a
predicted -14.4 percent drop, while Los Angeles has a predicted -10.3 percent drop
Florida markets are predicted to continue their impressive performances of 2011 into 2012. Both Tampa and Miami are expected to be in the highest performing five metro markets with 7.4 percent and 8.8 percent respective growth, while Jacksonville is expected to increase 4.3 percent, coming in at an respectable eighth place in the top metro marketplaces. The extraordinary growth from these marketplaces is are a result of a number of factors, which include being especially hit hard in the initial downturn. Although fighting back, they are significantly off their 2006 highs.
Other factors coning into play in these marketplaces include significant jumps in the value of low-end homes (nearly double-digits in every market) as compared to higher-end market segments, along with a large percentage of sales being all cash (51.8 percent) as compared to other metro marketplaces. This shows there's a high level of investors picking up bargains throughout the region, which drives up demand.
Even though the nationwide price range of movement stabilized through the end 2011, prices have begun to settle in at their lowest level since the early part of 2001. The 2012 forecast shows home prices dipping during the first quarter, while improving during the spring & summer home buying period, and climbing to a 0.2 percent in overall growth during 2012. Individual marketplaces reacting to the local economic situations continued to display a wide array of performance levels during 2011, while just 12 of the highest 50 metro marketplaces (24 percent), returned year-through-year price changes that may be considered to be stable - with price swings being under 2.5 percent. A trend that will continue on into 2012, while only 40 percent of the market considered being stable.
Jan 11, 2012