LPS: September Home Prices Down 1.2% on Continued Autumnal Price Pattern

Data released by Lender Processing Services, Inc. (LPS) on Monday indicates that the seasonal pattern in home prices LPS has noted since 2009 is still in place.   The company updated its home price index (HPI) with September sales information and found that home prices declined 1.2 percent during the month. 

According to Kyle Lundstedt, managing director for LPS Applied Analytics this decline was consistent with a pattern that has seen prices rise each spring "but revert in autumn for a downward trend that has not only erased the gains, but has led to an average 3.7 percent annual drop in prices to date."  He said that preliminary information for October suggests a further decline of approximately 1.1 percent. 

The LPS HPI tracks sales each month in more than 13,500 ZIP codes and five price levels within each ZIP.  The national average price of homes sold in September was 202,000.  As in previous years, this 1.2 percent decline followed a 0.9 drop in August.  The September 2011 figure is down 1.8 percent from the average price at the beginning of 2011.

 
The total value of the U.S. housing inventory peaked at $10.6 trillion in June 2006 and now stands at $7.56 trillion.  At the greatest period of deceleration which occurred from June 2007 to December 2008 the value of an average house fell from $282,000 to $226.000 or -13.8 percent.  Since then prices have fallen more slowly with brief intervals of appreciation.  During this period of slower decline the average house has lost $24,000 in value which corresponds to an average loss of 3.7 percent.

Price changes were consistent across the country in September with declines in all zip codes.  Higher priced homes had  somewhat smaller drops; the top 20 percent of homes, those with prices above $317,000, lost an average of 1.2 percent while the bottom 20 percent, homes priced below $102,000, lost 1.4 percent.  Price also declined in all 436 metropolitan statistical areas (MSAs) in the survey and in all five price levels.

The best performing MSAs, i.e. those with the smallest declines in prices, were in upstate New York, Michigan, and New England while MSAs with the greatest drops were in California (including Los Angeles), Nevada, and Arizona.