The latest report from First American CoreLogic projects a continued short term prices through the winter that will be driven by a surge in foreclosure sales hitting the market.
But the market will improve in the spring and a decline in unemployment and improvement in inventory levels will help prices bottom out in March 2010 and then prices will experience a 1% year-over-year appreciation by October.
The metropolitan statistical areas (MSAs) with the largest projected declines during the next six months include Detroit down 12.7%, Warren-Troy-Farmington Hills, Michigan at 11.4% and Cleveland 6.3%.
Those projected to see the strongest improvements during the next six months are all in the state of California; San Francisco up 5.7%, Los Angeles 5%, San Diego 4.7%, and Sacramento 4.6%.
‘We are continuing to see improvements in the year-over-year home price change as prices have remained relatively stable since April,’ said First American CoreLogic chief economist Mark Fleming.
‘The additional government support for the housing market has stimulated demand and restricted supply in 2009. How these government supports are removed in 2010 and the moderation of pending inventory and negative equity will be critical to the continued stability of the housing market,’ he added.
National property prices declined 7.8% year-over-year in October, according to the index. The decline is less than the 9.5% year-over-year decrease in September. Month-over-month, prices declined 0.7% between September and October.
Excluding distressed sales, year-over-year prices declined 5.8% in October, an improvement from the 6.3% year-over-year decline in September. The national HPI is 30.1% below its April 2006 peak. Excluding distressed sales, it’s down 21.5%.
Nevada experienced the greatest year-over-year price decline at 24.3% in October, followed by Arizona down 17.3%, Florida 15.5%, Michigan 13.9%, and Idaho 12.1%.
Excluding distressed sales, Nevada is still the worst performing state, with a 20.2% year-over-year decline in October. Arizona was 14.7%, Florida 13.7%, West Virginia 10.4% and Washington 9.4%.
