November Home Prices Decline 0.4%
FNC’s latest Residential Price Index™ (RPI), released Wednesday, indicates that U.S. home prices continued to decline despite recent signs of job recovery and rising home sales and new residential constructions. The continued price retreat comes as no surprise as the housing market remains constrained by high volumes of delinquent mortgages and home foreclosures. November marks the fourth consecutive month-to-month declines in residential property value. Modest downward pressure on home prices remains as banks continue to work through the backlog of delinquent mortgages and REO properties.
Based on the latest data on non-distressed home sales (existing and new homes) through November, FNC’s national RPI shows that single-family home prices fell in November to a seasonally unadjusted rate of 0.4%. As a gauge of underlying home value, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts reflecting poor property conditions. The RPI is the industry’s first hedonic price index − built on a comprehensive database blending public records with real-time appraisals of property and neighborhood attributes. One of the key advantages of the RPI is its ability to capture underlying home price trends by modeling observed sales prices as being determined by property and neighborhood attributes.
All three RPI composites (the National, 30-MSA, and 10-MSA indices) show month-to-month declines in November, ranging from -0.4% at the national level to -0.9% across the nation’s top 10 housing markets.
The indices’ year-to-year trends remain relatively stable in recent months, showing no signs of deceleration or acceleration. The two broader indices indicate a nearly 5.0% decline in the 12-month period between November 2010 and November 2011, or -0.4% per month on an annualized basis. The 10-MSA composite index lost about 4.0% during the period, or -0.3% per month annualized.
Among the individual markets tracked by the FNC 30-MSA composite index, about one in four shows a positive monthly price change in November. The largest monthly gain occurred in San Antonio, where home prices rose 2.1% from October to November. More notably, San Antonio has experienced continued price recovery following the end of the spring/summer home buying season. From May to November, the city’s home prices were up more than 5.0%, compared to an average of -3.3% declines across other markets. Atlanta’s market shows the largest monthly declines, down -2.7% in November, or averaging -2.2% per month in the last three months.
Year to date, San Francisco, San Antonio, and Minneapolis are among those showing the best price trends, up 4.5%, 2.4%, and 2.1%, respectively. The RPI index for the Houston market was revised downward since January 2011, dropping the city from the October ranking of top-performing markets. The worst year-to-date price declines are in Las Vegas (-9.5%), Atlanta (-8.8%), Tampa (-7.8%), Orlando (-7.3%), and Miami (-7.1%).
Year to year, Atlanta, Las Vegas, Tampa, and Orlando also top the nation in annual price depreciation, down 13.2%, 11.9%, 11.1%, and 10.4%, respectively. High single-digit price declines are seen in a number of markets, including Miami, Phoenix, Seattle, and Baltimore. San Francisco and Detroit are the only markets where property values rose from a year ago, up 3.0% and 0.9%, respectively.
Peak to date, nearly a third of the component markets of the FNC 30-MSA composite index are seeing home prices falling more than 50% from the peak of the housing market. Despite significant downward revisions of the city’s RPI, Houston continues to show near-peak price levels. Likewise, San Antonio property values have survived the housing crash, rising 3.9% above the market peak. A growing population and relatively steady and sustainable price growth during the housing bubble have largely contributed to the state’s ability to avoid a severe housing downturn.
 The FNC National Residential Price Index is a volume-weighted aggregate price index consisting of 100 major metropolitan areas across different regions of the U.S. All FNC Residential Price Indices are constructed to capture unsmoothed home price trends.