As home prices fell 3.2 percent during the last six months, many began to wonder where they will go from here. According to Housing Wire, Clear Capital believes that prices will drop another 2.4 percent throughout the remaining duration of 2011. However, five markets could experience gains before the end of 2011.
These markets are Washington, D.C., New York, Orlando, Dallas and San Francisco.
“While most individual markets are also projected to post losses for the year, it is clear prices have begun to level off and are not exhibiting as much volatility as we’ve seen since the downturn began,” said Alex Villacorta, director of research and analytics at Clear Capital to Housing Wire.
The REO inventory was down almost two percent in June, compared to three months prior, but these properties are still believed to be hindering nationwide median prices.
The Philadelphia Inquirer reports that some of the hardest-hit areas are experiencing 50 percent price declines, but this is likely in relation to distressed properties. Washington, D.C. actually experiences a 3.9 percent year-over-year increase without the inclusion of distressed properties, but with these they experienced a 1.5 percent decline.
“We believe that averaging distressed and non-distressed sales data provides a misleading picture to the public regarding home-price direction,” said Robert I. Toll, executive chairman of luxury home building company, Toll Bros. to the Inquirer.
Others disagree, believing that distressed transactions, which “account for about one-third of all sales,” are relevant to today’s market despite the downward toll they may inflict.
“The historic measure we have is for the median price of existing homes, which includes all transactions [traditional and distressed],” said Walt Molony, a spokesman for the National Association of Realtors in the article.
As the distressed properties continue to get absorbed, many housing experts believe that prices will hit bottom within the year and remain stable through 2015.
“At the mid-point of the year, it’s promising to see the overall market shake off the string of declines observed since late last year, especially in light of significant challenges for the industry,” Villacorta told Housing Wire. “However, we have yet to see the burst in consumer demand to avoid posting a net loss in national prices for the year.”