Foreclosures Dragged Down 2011 Prices to a 4.7 Percent Loss

Home prices in the U.S. decreased 4.7 percent in 2011, achieving the fifth consecutive annual loss after prices fell five straight months in a row in the second half of the year.

Without distressed sales, prices would have fallen only 0.9 percent in 2011, an indication of the impact of distressed sales on home prices in 2011 according to CoreLogic, a leading provider of information, analytics and business services.

In December, home prices decreased 1.4 percent on a month-over-month but excluding distressed sales, prices would have posted their posted its first month-over-month gain since July 2011, rising 0.2 percent. The December drop in home prices follows a decline of 4.3 percent in November 2011 compared to November 2010. Excluding distressed sales, year-over-year prices declined by 2 percent in November 2011 compared to November 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices,” said Mark Fleming, chief economist for CoreLogic.

Highlights as of December 2011

• Including distressed sales, the five states with the highest appreciation were: Montana (+4.4 percent), Vermont (+4.0 percent), South Dakota (+3.1 percent), Nebraska (+2.5 percent) and New York (+1.7 percent).
• Including distressed sales, the five states with the greatest depreciation were: Illinois (-11.3 percent), Nevada (-10.6 percent), Georgia (-8.3 percent), Ohio (-7.7 percent), and Minnesota (-7.5 percent).
• Excluding distressed sales, the five states with the highest appreciation were: Montana (+7.7 percent), South Dakota (+3.5 percent), Indiana (+3.3 percent), Alaska (+3.1 percent), and Massachusetts (+2.9 percent).
• Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-9.7 percent), Minnesota (-5.2 percent), Arizona (-4.9 percent), Delaware (-4.2 percent) and Michigan (-3.5 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2011) was -33.7 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -24.0 percent.
• The five states with the largest peak-to-current declines including distressed transactions are Nevada (-60.0 percent), Arizona (-51.9 percent), Florida (-50 percent), Michigan (-43.7 percent), and California (-43.5 percent).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 81 are showing year-over-year declines in December, one more than in November.