Double-Digit Year-over-Year Home Price Declines Continue According to Newly Released Data

Salem home prices continue to decrease.

Courtesy: The First American Core Logic

(SALEM, Ore.) - National resale housing prices fell across the country by 11.6 percent in January 2009 compared to a year ago, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI).

This represents 11 consecutive months of depreciation by more than 10 percent, and February preview data indicate the trend will continue.

In Salem, home prices have decreased 8.59 percent in January compared to a year ago. In December 2008, Salem showed a decrease of 8.98 percent compared to one year prior.

The composition of the top five depreciation markets began to shift in January as Nevada outpaced California with home price declines of 26.9 percent. California, which had led the nation in price depreciation since May 2007, showed a decline of 26.7 percent in January.

Arizona remained the third ranked state with price depreciation of 21.3 percent, but Rhode Island at 19.7 percent depreciation moved ahead to 4th in the ranking above Florida at 19.5 percent.

Since U.S. home prices peaked in July 2006, they have declined 21.2 percent on a cumulative basis and are currently back to the lowest price level last seen in March 2004.

The number of metropolitan markets experiencing price declines is, by far, the highest ever. As of January 2009, over 700, or nearly three-quarters, of all metropolitan markets were experiencing home price depreciation, up from 254 markets experiencing depreciation in December 2007 and 394 in June 2008.

"Home prices nationally continue to fall, and are no longer confined to just the 'sand' states. Nearly three quarters of all CBSAs are now experiencing declines, almost three times more than a year ago. The economic downturn and high levels of distressed housing inventory means that the likelihood of a price recovery will not begin until 2010," said Mark Fleming, chief economist for First American CoreLogic.

Among the country's 35 largest metropolitan markets, or Core Based Statistical Areas (CBSA), 10 markets show depreciation of more than 20 percent.

Methodology

The First American Core Logic Loan Performance HPI incorporates more than 30 years worth of repeat sales transactions, representing more than 45 million observations sourced from First American CoreLogic's industry-leading property information database. LoanPerformance HPI provides a multi-tier market evaluation based on price, time between sales, property type and loan type (conforming vs. nonconforming). The LoanPerformance HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same homes over time, which provides a more accurate "constant-quality" view of pricing trends than basing analysis on all home sales. The LoanPerformance HPI provides the most comprehensive set of monthly home price indices and median sales prices available covering 7,649 ZIP codes, 958 Core Based Statistical Areas (CBSA) and 676 counties located in all 50 states and the District of Columbia. Full-month October and through mid-month November 2008 state and top CBSA-level data can be found at loanperformance.com/products/hpi.aspx.