Reports say home price declines are slowing

Three measures of housing market health released so far this week indicate that price declines might be slowing in many areas of the country.
Three measures of housing market health released so far this week indicate that price declines might be slowing in many areas of the country.
Posted: May 11, 2012

Three measures of housing market health released so far this week indicate that price declines might be slowing in many areas of the country.

The National Association of Realtors on Wednesday said its first-quarter data for the nation’s metropolitan areas showed median existing single-family home prices are “firming” in many, while improving sales and declining inventory are creating “more balanced conditions.”

The group’s data for the Philadelphia metropolitan area, including Wilmington, however, showed median prices for the first quarter at $193,500, down 3.7 percent from $201,000 in the fourth quarter and 2.8 percent from the first three months of 2011.

The latest numbers from Fiserv Case-Shiller, which tracks Philadelphia metro prices quarterly, showed the region’s prices fell 5.79 percent in the 12 months ending Dec. 31, 2011, which is the most recent period it has tracked.

Fiserv’s home price projections indicate, however, that prices will fall only an additional 0.69 percent in the region in the 12 months ending Dec. 31.

“After years of large declines, the housing market is showing signs of stabilization,” Fiserv stated. It said the entire country should expect a further decline in prices of just 0.8 percent by year’s end.

What’s more, because of several years of declining prices, affordability has reached a 40-year high, Fiserv reported, with a conventional mortgage payment just 12 percent of median family income.

Home prices are back to 1998 levels compared to rents, it said, while average home prices are expected to rise at an annualized rate of 3.9 percent over the next five years.

CoreLogic, the real estate information service, reported Tuesday that Philadelphia-region prices rose 0.7 percent in March over the same month in 2011, after a year-over-year loss of 2.1 percent in February.

Excluding sales of distressed housing — short sales and bank-owned foreclosures — home prices increased 1.8 percent in March from the same month in 2011, CoreLogic said.

“This spring, the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in house prices,” said Mark Fleming, chief economist for CoreLogic.

Foreclosure sales rose in the city of Philadelphia in the first quarter of 2012, according to Econsult vice president and economist Kevin Gillen.

Gillen reported in April that sales of bank-owned repossessions had spiked to 902 in the city, reaching an unprecedented level of quarterly transactions.

The foreclosure sales “really appear to have hit North and West Philadelphia hard,” Gillen said. “Even after dropping those transactions from the data, house prices in those two neighborhoods fell by 10 percent” in the first quarter compared with the fourth quarter of 2011.

“Declines in the rest of the city’s neighborhoods were generally in the low single digits,” however, he said.

CoreLogic reported Wednesday that short sales, modifications, and other foreclosure alternatives are playing a larger role than in years past, and the flow of new foreclosures is declining with an improving economy.

In addition, the 90-day-plus serious delinquency rate in March fell to 7 percent, the lowest rate since July 2009.

“This decline in serious delinquency represents a significant reduction of approximately three quarters of a million borrowers,” Fleming said.

Yet another source, the National Housing Conference and Center for Housing Policy, reported Wednesday that serious delinquency rates rose in major metropolitan areas in March, even as the 90-day-plus rate remained flat at 3.8 percent, according to its calculations.

The serious-delinquency rate did grow the most among the top 25 metro areas in Atlantic City-Hammonton — 1.9 percent — and Vineland-Millville-Bridgeton — 1.7 percent, from March 2011.

This growth could reflect prolonged high unemployment rates in Shore communities hard hit by slowdowns in the gambling and construction industries.

The St. Louis Federal Reserve put March unemployment in Atlantic County at 13.2 percent, 15.8 percent in Cape May County, and 10.5 percent in Ocean County.

The Bureau of Labor Statistics puts the Philadelphia metro jobless rate at 8.1 percent.

Contact Alan J. Heavens at 215-854-2472, aheavens@phillynews.com or @alheavens at Twitter.

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