After reporting a nationwide double-dip in home prices in its May report, Clear Capital said there are signs for a recovery in the real estate market.\The valuation firm believes the summer buying season and higher sale prices for distressed properties could provide stabilization for the troubled industry.
Despite national home prices falling 2.3% in the May Home Data Index Market Report, the drop is less than half of the decline compared to the April report, which was at 4.9%. For the year, home prices have gone down 7.6%.
“Home prices are starting to ease back from the heavy declines seen over the winter,” said Alex Villacorta, director of research and analytics at Clear Capital. “We are still far away from the strong demand needed to fully turn things around for the housing market; however, it is clear from the initial spring sales data that prices are softening, suggesting stabilization in the market.”
Every region throughout the country saw a significant difference in home price declines from the last report, led by the Midwest, which was down only 4.9% compared to 8.3% in April. The Northeast fell 1% from 2.8%, the South was down 1.8% from 4% and the West saw a decline of 1.6% from 4.7%.
Seven of the top 15 highest performing major markets had quarter-over-quarter price gains, compared to zero in the previous month’s report. Washington, DC had the largest increase at 4.5%, followed by St. Louis at 2.2% and Pittsburgh at 1.6%.
The national REO saturation rate—the percentage of bank-owned homes sold as compared to all properties sold—has also started to level off to 33.9%, down from 34.5% in April.
“The median price paid for distressed properties has risen over the past three quarters, which is a good sign that the REO market segment is seeing increased activity toward the upper end of this space.”
