With the winter months quickly approaching, there seems to be an ominous picture for national home prices.
For the 13th straight month, home prices experienced a year-over-year decline with properties going down 2.8% in October, according to the real estate analytic firm Clear Capital.
The Truckee, Calif.-based firm found that quarterly home price gains are beginning to retreat to flat levels with a modest 0.6% growth last month, well below the 3.5% increase reported through September.
The West region continues to be the weakest performer, posting a 1% quarterly price decline and a 5.5% yearly fall. For the fourth consecutive month, the Midwest produced the strongest quarterly gains with a 2.6% increase, but a sharp drop from the summer growth of 7.2%. The Northeast saw a 1.5% rise in home prices, while the South had a slight .5% jump.
“October home prices gains have leveled out,” said Alex Villacorta, director of research and analytics at Clear Capital. “Short term gains have been nearly eliminated while longer term performance measures point to mostly negative territory the turn of the year.”
Cleveland was the highest quarter-over-quarter performer with a 6.2% price increase, but still remains 58.1% off its market highs experienced in the first quarter of 2005.
The Southern region had eight of the 15 highest performing markets, including four Florida Metropolitan Statistical Areas—Jacksonville, Tampa, Miami and Orlando—that saw its REO saturation decline by an average of 16.2% since the first quarter this year.
Las Vegas was the lowest performing market with a -3.4% price decrease for the second straight month. In this month's report, all 15 of the worst performing markets experienced quarterly price declines.
For the highest performing markets, the REO saturation rate was less than 23%, compared to 30% for the lowest performing markets.
With high rates of REO saturation, in which seven of the lowest performing markets had a distressed rate higher than 35%, Villacorta said he “expects another long winter as the housing market will truly be put to the test against low consumer confidence and the oversupply of distressed inventory that continues to flow into the market.”
