National home prices have double-dipped in April, falling .7% below previous lows experienced in March 2009, Clear Capital said in its latest Home Data Index report.
In April, quarterly home prices were down 4.9% throughout the country, while year-over-year prices fell 5%. Over the past nine months, national home prices have fallen 11.5%.
One of the main reasons why the country has seen this double-dip is the volume of REO in the marketplace. Clear Capital said the national REO saturation rate reached 34.5% in April.
Both of these trends are similar to what was experienced in 2008, when national REO saturation increased from 20% to the mid 30s, while home prices decreased by 15.6 over a nine-month period.
“The latest data through April shows a continued increase in the proportion of distressed sales that are taking hold in markets nationwide,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales.”
Every major Metropolitan Statistical Area tracked in the report showed quarter-over-quarter declines.
The Midwest, which has not yet double dipped, was the worst performing region, with quarterly home prices dropping 8.7%, while year-over-year prices have fallen 6.3%. These price drops were primarily driven by a 4.3% jump in the quarterly REO saturation rate compared to last month, putting current distressed levels at approximately 40%, the report said.
The West, which first experienced a douple dip in March, was not the worst performing region over the past three months, as its prices fell only 3.4%. The Northeast was down 3.7% and the South was down 3.8% during the same time period.
All of the top 15 major markets experienced price drops over the last three months. REO saturation also climbed in 11 of the top 15 MSAs, led by Las Vegas with a 53.7% rate. Only Riverside, Calif., Los Angeles and Dallas saw their REO saturation rates improve compared to the March report, while the distressed rate in Phoenix remained flat. These same MSAs, along with San Jose, saw quarterly home price gains, up 1% respectively in each city.
Seven of the lowest performing major markets were from the Midwest. For the fourth consecutive month, Detroit was the lowest performing major market with an REO saturation rate of 55.6%. Detroit had a quarter-over-quarter 13.4% home price change.
Only Minneapolis and Fresno, Calif. had rates also over 50%. There were eight markets that saw its REO saturation rate above 40%.
“As more REO transactions take place, overall prices continue to remain down, a sign that financial institutions may be looking to cut losses on large inventories of property,” Clear Capital said.
