Last September a HomeGain survey of real estate professionals and homeowners detected a grass roots souring on the price outlook for the coming six months, even though many experts predicted a quicker recovery from the post-tax credit hangover.
The experts were proved wrong as the decline in prices turned out to be a bit longer than six months. Today ClearCapital made it official, reporting that nationally year-over-year prices have declined for 13 consecutive months and the streak hasn’t ended yet.
Prices in October are down -2.8 percent year-over-year and U.S. quarterly home price gains through October retreated to near flat levels with only 0.6 percent growth, compared to the 3.5 percent rolling quarter increase reported through September.
Three of the four U.S. regions posted slight quarterly gains, but at rates well off their summer growth. Across the nation, local markets experienced a general downward trend as the 15 highest performing major markets posted softer gains, while the 15 lowest performing markets experienced stronger declines.
Cleveland, OH, was the highest quarter-over-quarter performer with a 6.2 percent price increase, while Las Vegas, NV, was the lowest performing market with a -3.4 percent price decrease.
“October home price gains have leveled out, confirming what our data has pointed to over the last several months,” said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. “Short term gains have been nearly eliminated while longer term performance measures point to mostly negative territory through the turn of the year.”
“With current tepid demand expected to weaken even more, consumer confidence at record lows, and as the distressed inventory continues to flow into the market, we can expect another long winter as the housing market will truly be put to the test against these downward forces,” Villacorta said
For the quarter, U.S. home prices fell flat with only a slight gain of 0.6 percent through the end of October. The slight gains seen this month indicate a slowing down of growth relative to last month’s 3.5 percent gains, and indicate the effects of the slower buying season are now upon us.
The West is showing continued weakness and is the first region to dip into negative territory quarter-over-quarter, posting a loss of 1.0 percent, comparing to a 0.3 percent increase last month. Looking at year-over-year prices, the West is also posting the largest declines, down 5.5 percent. The Midwest checked in with solid quarterly growth of 2.6 percent, but when compared to last month’s growth of 7.2 percent, it becomes clear the strong Midwest is also starting to feel that oncoming winter chill.