Yesterday, CoreLogic, an industry provider of real estate data, released a report indicating home values experienced a seventh straight month of year-over-year decline in February. And what's significant is that the losses are getting bigger rather than smaller.
U.S. home prices, including distressed sales (i.e. short sales and real estate owned (REO) properties), sank 6.7 percent in February 2011 when compared with February 2010. Contrast this with the numbers for January 2011, which exhibited a 5.5 percent slide against January 2010.
The picture is slightly less ominous if you remove the distressed sale data. In that scenario, year-over-year prices declined by 0.1 percent in February 2011 compared to February 2010. However the fact that home values are still depreciating at all appears to validate the predictions of experts like Anthony Sanders, real estate finance professor at George Mason University. Sanders warned that home values could fall another four to five percent this year.
Keep in mind that these figures represent a national average, and just like the foreclosure discount numbers, not all states were created equal. According to the CoreLogic report, here are the Top 5 States for Depreciating Home Values:
- Idaho - Home values were down 14.6 percent in February 2011, measured against February 2010. We're used to seeing Nevada, Florida and other foreclosure-challenged states on lists like these. But what's the deal in Idaho? Well, although the potato state's problems haven't received as much media coverage, over 30 percent of homeowners are either already underwater or approaching negative equity.
- Arizona - When allowing for distressed sales, home prices experienced a decline of 12 percent in February versus the same period last year. But even with the removal of distressed data (which would make little sense as so many, many homeowners are in a distressed state), "regular" home values dropped 5.4 percent within the same timeframe. (I was driving around Phoenix this week and it's distressing to see all the "for sale" signs.)
- Florida - Another regular on our list of real estate problem children, The Sunshine State has felt the pain resulting from the burst of the housing bubble rather acutely. Florida homeowners lost another 11.2 percent in market price this February when compared with the same month in 2010.
- Michigan - One could make the argument that no city has been brought to its knees in terms of value declines, foreclosures and overall housing misery quite like Detroit. As long as homes in the Motor City can be had for $100 or less, the only surprise is that the state's overall 11.1 percent price drop isn't much worse.
- Illinois - Though CoreLogic puts the Land of Lincoln in fifth place, with an average home value decline of 11.1 percent, the state is tied with Michigan. The Midwest, along with the Southwest, has been one of the most put upon regions since the housing crises began.
To view the full CoreLogic report, click here.
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.