US House Prices Maybe Stabilising
10 October 2011
According to the latest data from Corelogic, US home prices fell 4.4% year on year in August, down from 4.8% in July. But the most significant finding is that the decline was driven almost entirely by distressed sales. According to Corelogic, prices in the non-distressed segment -- excluding short-sales, and real estate owned (REO) sales -- fell just 0.7% compared to last August, this is down from the 1.7% decline in July.
This is significant for two reasons, a: becau8se it indicates that the mainstream market seems to finally be stabilising, and b: distressed sales are continuing to see prices fall at an accelerated rate, which is good news for the droves of foreign investors pouring into America to find bargains.
The data also shows that prices were down 0.4% on the month, which is the first month-on-month decline recorded by the index in 4 months. However, this could easily be attributed entirely to distressed sales. Mark Fleming, chief economist for CoreLogic said:
"Although the calendar says August, the end of the summer traditionally marks the beginning of 'fall' for the housing market as it begins to prepare for winter. So the slight month-over-month decline was predictable, particularly given the renewed concerns over a double-dip recession, high negative equity, and the persistent levels of shadow inventory. The continued bright spot is the non-distressed segment of the market, which is only marginally lower than a year ago and continues to exhibit relative strength."