National Home Price Declines Continue to Improve

Portland-Vancouver-Beaverton Home Prices Decrease

National housing prices fell 9.2 percent in May compared to a year ago representing the smallest year-over-year decline recorded in 2009 and the lowest since December 2007, according to newly released data from First American CoreLogic and its LoanPerformance Home Price Index (HPI). May's decline was a 0.5 percent improvement over the 9.7 percent decline in April.*

In Portland-Vancouver-Beaverton, home prices have decreased 11.16 percent in May compared to a year ago. In April 2009, Portland-Vancouver-Beaverton showed a decrease of 12.16 percent compared to one year prior.

The rate of national price declines for residential single-family detached properties peaked at 11.9 percent in January 2009 and has since improved by over 2.5 percentage points through May. The June preview data suggests further improvements in the rate of decline.
Since U.S. home prices peaked in July 2006, national home prices have declined 20.1 percent on a cumulative basis.
Despite the improvement in the national trend, the geographic breadth of price declines has not improved. Forty-one states experienced price declines, and 16 states had double-digit declines in May, well above the number of states experiencing declines a year ago.
Nevada (-26.4 percent) remained the top-ranked state for annual price depreciation with Florida (-25.5 percent) close behind. California's (-19.8 percent) price trend continued to improve in May and is currently more than 10 percentage points better than the peak decline of 30.3 percent set in August 2008. Arizona (-18.1 percent) and Illinois (-16.9 percent) round out the top five states for price declines. Florida and Illinois are the only two states that are not currently showing signs of moderation or improvement in the declines among states experiencing the largest price decreases.
Over the past few months there has been a divergence in single-family detached residential properties vs. single-family attached residential properties, which include condos and townhomes. As of May, prices of attached properties declined 12.0 percent from a year ago, compared to a 9.2 percent decrease for detached properties. The gap reflects the very weak condo market, tighter underwriting guidelines for this type of property, and the faster run-up in prices for condos during the bubble market.
"Although there has been some improvement in the national HPI, collateral risk will continue to be the main driver of the housing market for the remainder of 2009," said Mark Fleming, chief economist for First American CoreLogic. "Until home prices and the economy stabilize, mortgage performance will continue to worsen and home sales activity will remain flat nationally through 2010."

* April's decline was revised downward from 10.2 percent to 9.7 percent.

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