Yearly Price Gains Maintained by Decrease in Distressed Sales
The FHA Condos Approval Company, Inc.
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Summer’s end may have led to the close of a strong home-buying season, but a decrease in distressed sales is helping prices maintain their yearly gain and some regions are still experiencing monthly price increases.
As of August 23, 2012, prices fell 0.4 percent in 25 major U.S. metropolitan areas from July 23, 2012, according to Radar Logic’s RPX Composite price. Year-over-year, prices were still up 4.5 percent, and year-to-date, the RPX composite showed prices have risen 12.8 percent, the largest increase for the period since 2005.
When Radar Logic broke down the data based on region, a more complex picture was painted.
“There was considerable variation in price performance from region to region. In some areas prices have clearly peaked for the year and are now declining, while in others prices are still rising,” the real estate data provider said in its monthly housing report.
The Midwest and the West saw monthly price gains and rose 2.5 and 1.2 percent, respectively. In the South, prices were flat, increasing just 0.1 percent. Radar Logic said the South may have reached its seasonal peak and begin its seasonal descent. The Northeastern housing market brought the RPX Composite price down month-over-month with its 3.1 percent descent.
Year-over-year, price gains were seen in the South (6.7 percent), Midwest (7.3 percent) and West (9.2 percent). On the other hand, the Northeast fell 2.3 percent, according to the RPX Composite.
Over the last year, REO and foreclosure auction sales have seen a significant decline, which has helped to push up prices.
According to Radar Logic, motivated sales, or sales of REOs or foreclosures, fell to 13 percent of the total transaction count, down from 23 percent a year ago.
This decline in motivated sales led to the yearly increase in the RPX Composite. Over the last year since August 23, the price for motivated sales has been 34 to 42 percent less than the price for all other non-motivated transactions, according to data from Radar Logic.
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