Latest National HPI—Nine-Month Depreciation May Be Easing

Top 10 Best and Worst Performing Real Estate Markets Identified

Date: 12/22/2008

National Home Prices Show Steady Depreciation for Nine Straight Months According to Newly Released LoanPerformance Home Price Index

Home prices across the country declined 10.4 percent in October compared to a year ago, representing nine consecutive months of depreciation, but a slight improvement over September which showed an 11.2 percent decline. Early preview data for November indicate continued improvement with an anticipated decline of 9.6 percent, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI).

The October HPI shows that home prices have now maintained a steady annualized depreciation rate of between 10 and 11 percent for nine months in a row. Using the LoanPerformance HPI, the Federal Reserve estimates that the total value of all properties has declined by over 2 trillion dollars over the last 12 months ended in Q3 2008.

"The consistent deceleration over the past two months with November indicating the same trend in price declines is encouraging because it could portend the trough in price declines,” said Mark Fleming, chief economist for First American CoreLogic. “However, the rapid contraction in the economy, deteriorating labor markets, the large inventory of unsold homes and increasing defaults suggests that home prices will continue to decline but with a moderating pace throughout 2009, particularly given the surge in FHA lending which typically has a lower than average sales price," he said.

TOP AND BOTTOM PERFORMING MARKETS

• In the rankings of the top 10 best and worst performing markets, California holds the distinction of having 9 out of 10 markets with the highest home price depreciation.

LoanPerformance HPI Top 10 City Ranking:

Core Based Statistical Areas (CBSA) with the Highest Home Price Depreciation

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of October 2008

Core Based Statistical Areas (CBSA) with the Highest Home Price Appreciation:

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of October 2008

LoanPerformance HPI Largest CBSAs Ranking:

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of October 2008

LoanPerformance HPI State Rankings:

• The geographic dispersion of home prices has increased during the last two months. Forty-four states experienced annual price declines as of October, up from 41 in September.
• California remains the clear leader as prices have declined 28.3 percent annually followed by Nevada (25.4 percent), Arizona (20.1 percent), Florida (17.8 percent), Rhode Island (16.1 percent), Wyoming (13.5 percent) and Hawaii (13.1 percent).
• West Virginia (5.9 percent), South Dakota (2.9 percent) and Texas (2.7 percent) are the only states exhibiting meaningful price increases. States with price increases account for 13 percent of the U.S. population.

Source: First American CoreLogic, LoanPerformance HPI, Single-Family Detached as of October 2008

Methodology:

The LoanPerformance HPI incorporates more than 30 years worth of repeat sales transactions, representing more than 45 million observations sourced from First American CoreLogic’s industry-leading property information database. LoanPerformance HPI provides a multi-tier market evaluation based on price, time between sales, property type and loan type (conforming vs. nonconforming).

The LoanPerformance HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same homes over time, which provides a more accurate "constant-quality" view of pricing trends than basing analysis on all home sales. The LoanPerformance HPI provides the most comprehensive set of monthly home price indices and median sales prices available covering 7,618 ZIP codes, 958 Core Based Statistical Areas (CBSA) and 677 counties located in all 50 states and the District of Columbia. Full-month October and through mid-month November 2008 state and top CBSA-level data can be found at www.loanperformance.com/products/hpi.aspx.