February Price Decline Smallest in 17 Months

Prices are still falling, but the pace of the decline continues to slow according to the February Home Price Index (HPI) report released today by CoreLogic.  Home prices, including distressed sales, declined in February by 0.8 percent from January's numbers, the seventh consecutive monthly decline. On an annual basis the HPI was down by 1.98 percent, improving on the year-over-year January price change of -2.88 percent and of -4.0 percent in December.  It was the smallest annual rate of decline in any month since September 2010 when the rate was also -1.98 percent.

When distressed home sales, that is lender-owned real estate (REO) and short sales are eliminated from the data, prices rose in February by 0.7 percent compared to January when prices were also up by 0.4 percent.   January was the first month when non-distressed home prices rose since last July.  

With distressed transactions included, the HPI had declined by 34.4 percent since its peak in April 2006.  When distressed transactions are excluded, the peak-to-current change in the HPI for the same period was -24.6 percent.

"House prices, based on data through February, continue to decline, but at a decreasing rate.  The deceleration in the pace of decline is a first step toward ultimately growing again," said Mark Fleming, chief economist for CoreLogic.   "Excluding distressed sales, we already see modest price appreciation month over month in January and February."

"The continued strength of sales activity and tightening inventories in many markets are early and hopeful signs that prices will continue to stabilize and improve in the coming months.  In fact, non-distressed home sale prices, which represent two-thirds of all sales, have appreciated by just over 1.0 percent since the beginning of the year," said Anand Nallathambi, president and CEO of CoreLogic.

Of the top 100 Core Based Statistical Areas (CBSAs) followed by CoreLogic 67 are showing year-over-year declines in February, nine fewer than in January. 

Prices, including distressed sales had the greatest appreciation in West Virginia (+8.6 percent), Michigan (+5.8 percent), Florida (+4.7 percent), Arizona and South Dakota (+4.5 and +4.1 percent).  Excluding distressed sales the five states with the largest appreciation were South Dakota, (+5.9 percent), West Virginia (+5.6 percent), Maine (+4.5 percent), Utah (+3.7 percent), and Montana (+3.6 percent).

The greatest depreciation including distressed sales was in Delaware (-11.2 percent), Connecticut (-7.9 percent), Rhode Island (-7.8 percent), Illinois (-7.1 percent), and Georgia (-6.6 percent).  Excluding distressed sales Delaware (-8.7 percent) and Connecticut (4.9 percent) are still numbers one and two followed by Nevada, Vermont, and Minnesota (-4.6, -4.0, and -3.3 percent respectively.)

Since the peak in 2006 Nevada has seen a 60.2 percent drop in prices, and Arizona, Florida, Michigan and California have had peak-to-current price declines of 44 percent or more.