(MoneyWatch) Short sales and huge inventories of bank-owned real estate properties continue to put downward pressure on home prices, according to data released today by California-based analytics company CoreLogic. Fifty-seven of the 100 largest statistical areas based on population posted year-over-year declines in March.
Nationally, CoreLogic's March Home Price Index report shows prices fell 33.7 percent in March 2012, from their peak in April 2006.
Home prices, including distressed sales, edged downward year-over-year, falling 0.6 percent from March 2011 to March 2012. Excluding distressed sales, home prices rose slightly, climbing 0.9 percent year-over-year.
In spite of the yearly decline, home prices rose month-over-month. Including short sales and real estate held by banks, prices increased 0.6 percent month-over-month -- the first monthly rise since July 2011. Proving just how much of a drag short sales and REOs are on home values, prices have appreciated monthly for three consecutive months when distressed sales are excluded from the stats.
Even with all the bad news, the relatively flat monthly and yearly changes seem to indicate prices are beginning to steady.
"This spring the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in housing prices," Mark Fleming, chief economist for CoreLogic, said in a press release. "Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales."
"While housing prices remain flat nationally, in many markets tighter inventories are beginning to lift home prices," Anand Nallathambi, president and CEO of CoreLogic, said in a statement. "This is true in Phoenix, New York and Washington, for example, which all reflect higher home price values than a year ago. A continuation of this trend will be good for our industry across U.S. markets."
Even with the burden of distressed sales, some states saw significant price appreciation. Wyoming, West Virginia, Arizona, North Dakota and Florida all saw yearly gains of 4 percent or more. Wyoming topped the list with an increase of 5.9 percent year-over-year.
Short sales and REOs contributed to yearly price declines in many states, but Delaware, Illinois, Alabama, Georgia and Nevada saw the largest depreciation. Home prices in Delaware fell 10.6 percent from last year, but all the states in the bottom five saw declines of five percent or more.
We'd all love to see home prices stabilize; unfortunately, most homes will bottom out at prices well below their peak values. Mortgage rates remain low and housing is affordable, but until consumers can afford everyday items like gas and groceries, it's unlikely they'll be jumping in to help with the housing market recovery.