Oxford real estate data firm FNC’s Residential Price Index(RPI) released Wednesday indicates that U.S. residential property values declined in December amid signs of continued improvement in the job market and economic growth. With sales of distressed properties comprising a large portion of overall home sales, prices on non-distressed sales continued to reflect the downward pressure distressed sales have on underlying property values. December marks the fifth consecutive month-to-month declines and sends home prices down 3.5 percent from a year ago.
Challenges underlying the distressed housing sector will continue to restrain the housing recovery.
Based on the latest data on non-distressed home sales (existing and new homes) through December, FNC’s national RPI shows that single-family home prices fell in December to a seasonally unadjusted rate of 0.7 percent.
As a gauge of underlying home value, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts reflecting poor property conditions.
All three RPI composites (the National, 30-MSA, and 10-MSA indices) show month-to-month declines in December, ranging from -0.7 percent at the national level to -1.1 percent in the nation’s top 10 housing markets.
The indices’ year-to-year trends generally show the pace of price declines slowing. The national RPI indicates that December home prices declined at a seasonally adjusted rate of 3.5 percent, the smallest year-to-year declines since May 2010 when home prices rebounded under the federal homebuyer tax credits program. The year-to-year declines at the nation’s top housing markets, as indicated by the 30- and 10-MSA composites, have also decelerated to their slowest pace.
Among the individual markets tracked by the FNC 30-MSA composite index, seven showed a positive month-to-month change in December: Baltimore, Charlotte, Cincinnati, Detroit, Houston, Miami, and Tampa. The largest monthly gain occurred in Houston where home prices were up again in December by 2.5 percent after rising 1.6 percent in the previous month. Baltimore, Charlotte, Detroit, and Tampa also recorded higher prices in both November and December.