LPS Reports January Home Prices Down 0.9 Percent
Home prices for January 2012 dropped 0.9 percent, an even greater increase from the 0.4 percent drop in December 2011, according to Lender Processing Services’ Home Price Index (HPI).
For January, home prices averaged at $195,000, dropping from December’s average of $196,000.
In LPI’s previous report, the average price for January was expected to drop 1.2 percent; February’s estimated drop is 0.3 percent.
From June 2007 through January 2008, which is characterized as the period of rapid price declines, the index showed prices fell at an average annual rate of 10.9 percent.
In June 2007, prices averaged at $262,000, with foreclosure sale discounts averaging 20 percent, and short sale discounts averaging 10 percent. As foreclosure sale discounts increased to 29 percent and short sale discounts went up to 18 percent in January 2009, prices dropped to $218,000.
Out of 585 MSAs the report covered, prices fell in a total of 524 areas, and for 39 states, all MSAs covered saw a decline in prices.
Of the largest 26 MSAs, Pittsburgh is the only one that saw average home prices increase since January 2005 when seasonal variations are factored in.
LPS also announced that its Applied Analytics division updated the index starting with this report by accounting for the impact of short sales on estimates of normal market prices and by increasing geographic coverage through the inclusion of FHFA HPI data.
“With proper accounting for short sales, we see two things. First, prices on normal (non-distressed) properties are doing a bit better than had been estimated before. The dramatic fall in prices after the bubble is actually closer to 26 percent, less than the 30 percent which we and others have previously reported,” said Raj Dosaj, VP of LPS Applied Analytics. “The second piece of information gleaned is that banks are getting about the same price on both short sales and foreclosure sales in areas that have high levels of distressed transactions.”
LPS is a provider of technology, data and analytics for the mortgage and real estate industries.