National average home prices in June were still 7.9 percent below a year ago, which was the height of the boomlet spawned by the tax credit. However, prices are still up 4.1 percent over the first quarter.
Those are the cautionary findings from Clear Capital’s second quarter report, which is based on data from fair market and REO transactions from recorder and assessors offices as well as market reports.
Northeastern markets are doing better than the national average and the broader New York City area, Rochester and Pittsburgh posted positive year-over-year price growth in June-above the levels created by last year’s tax credit.
When the stimulus effect of the tax credit on prices a year ago is removed, all four U.S. regions (Midwest 6.3 percent, Northeast 5.2 percent, South 4.2 percent, West 0.7 percent) posted quarterly gains for the first time since 2006.
REO saturation rates have leveled off, but more than one-in-four home sales across the country remain distressed. The inverse correlation between distressed sales activity and home prices continues to depress the market.
“Building off last month’s minimal quarterly gains, prices continue to correct from winter’s extended declines,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Although this is encouraging, many markets are still near, or at record lows as REO saturation remains a significant proportion of all sales activity.”