House Prices Up 5.1 Percent in April Amid Slower REO Growth

Home prices in April gained 5.1% from last year, while REO levels across the country slowed their climb, according to the real estate data provider Clear Capital. The firm measures home prices on a rolling three-month period. On that timescale, prices dropped another 5% in April after a 3.9% decrease in March. But the 5.1% gain from last year matched the yearly gain shown in March. REO took up 29.6% of the market in April, less than a percentage point of growth from 28.9% in March when levels increased from 26.1% in February. Drilling down, the rolling three-month price drop affected the yearly growth for the center regions of the country. Price gains in the Midwest declined through April to 11.3% from last year, down from 12.8% in March. Gains in the South dipped to 3.3% from 3.4%. But prices in the West have grown 4.6% from last year, while prices in the Northeast have grown 2.2%. Further down, the best performing markets manage to post positive gains as the tax credit expired in April. Honolulu, Hawaii saw a 3.3% increase from three months ago, the highest growth of an metro-are in the country. Home prices in the District of Columbia averaged a 8.4% from last year, ending a 42.8% drop from is peak in 2006. Alex Villacorta, senior statistician at Clear Capital, said an interesting dynamic their seeing is the distinction between markets that resist increased levels of REO and those that remain sensitive to them. “For example, the highest performing metro areas have seen prices remain relatively flat over the last quarter despite REO saturation rates averaging just above 33 percent. Contrast this with the lowest performing areas which have seen prices drop dramatically with average declines of more than 10 percent and average REO saturation rate less than those in the highest performing areas,” Villacorta said. “This paradox suggests that price trends are not wholly dependent on distressed sale volume, and re-enforces the need to understand local market trends.” Write to Jon Prior.

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