A rising share of distressed home sales pushed down prices on nondistressed homes for the seventh month in a row in February, according to a price index from FNC, a provider of real estate collateral management software.
FNC’s Residential Price Index (RPI) is a "hedonic" index based on data collected from public records and combined with appraisal data that includes information on a property’s physical condition and neighborhood attributes.
Sales prices of nondistressed new and existing single-family homes fell 0.8 percent in February compared to the month before and 3 percent from February 2011. Both figures are unadjusted for seasonality. The index excludes sales of bank-owned homes (REOs), short-sale homes, and homes sold at foreclosure auction.
Seven consecutive months of price declines have "coincided with a rising share of distressed properties in total home sales, which climbed from 22.8 percent in July to 27 percent in February, pushing down the prices on nondistressed home sales. Continued acceleration in disposing the inventory of distressed homes could further dampen home prices in the coming months," FNC said in its index report.
In its calculation of distressed sales, FNC includes properties repossessed by lenders ("real estate owned" homes) and homes sold at a foreclosure auction, but does not include short sales.
Three-month index trends for a national composite, a composite of 30 major metro areas, and a composite of 10 major metro areas show similar monthly decreases in December, January and February of around 1 percent and similar yearly decreases hovering around 3 and 4 percent, though February’s 3 percent rate was the slowest deceleration rate in 20 months, according to the report.
Among the individual markets in the 30-MSA composite, 12 posted modest monthly increases in February with Cleveland seeing the biggest rise, 2.9 percent, followed by San Antonio (2.1 percent), and Riverside, Calif. (2 percent).
Of the remaining 18 markets, Baltimore and Tampa, Fla., saw the sharpest monthly price drop, 2.4 percent each, followed by Detroit (2.1 percent) and New York (1.8 percent).
Only six of the 30 markets experienced year-over-year price increases: San Antonio (2.5 percent), Minneapolis (2.5 percent), Detroit (1.8 percent), San Francisco (1 percent), Boston (0.9 percent), and Denver (0.5 percent).
Among the markets where prices fell, Atlanta posted the biggest hit (10.7 percent), followed by Las Vegas (10 percent), Seattle (8 percent), Baltimore (7.5 percent), Tampa (7.3 percent), and Washington, D.C. (7.3 percent).
Peak to date, prices in the 30-MSA composite have dropped 33.6 percent. Only San Antonio has seen its prices rise above its market peak, 4.9 percent. Houston, whose prices have fallen only 0.1 percent from peak, comes in second. The vast majority of the remaining markets saw double-digit drops from peak led by Las Vegas (62.8 percent), Phoenix (59 percent), Riverside (58.6 percent), Orlando (58 percent), Sacramento (57.1 percent), and San Francisco (49.9 percent).