National home prices increased 3.7% in Q309 compared to Q209 while the year-over-year price decline improved, according to real estate data provider Clear Capital. The yearly price decline was 8.4% in Q309, 1.5 percentage points narrower than the yearly decline seen in Q209.
A decline in the percentage of real estate-owned (REO) sales in major markets fueled the improved prices, Clear Capital said.
“Nationally, both the top and bottom performing markets are converging to modest quarterly changes, indicating a return to stable markets,” said Alex Villacorta Sr., a Clear Capital statistician. “As we’ve seen since the spring season, many markets have returned to traditional seasonal fluctuations and the strong summer gains are showing signs of slowing.”
The greatest quarter over quarter improvement was in the Midwest, which experienced a 7.5% increase in prices from Q209, followed by the South, which experienced a 3% quarter-over-quarter increase. The Northeast had a 2.3% increase, followed by a 2.1% increase in the West.
Year-over-year declines were the lowest in the South, which had a 6.5% decrease, followed by the Northwest (7.2% decline), Midwest (7.7% decline) and the West (14% decline).
The national REO saturation rate, or the proportion of homes on the market that are REO was 28%, a 5.1% improvement from Q209.
“The continued decline in REO saturation rates, as well as an increase in the proportion of cash buyers in both distressed and fair market sales, are an encouraging sign of investor optimism coming into the traditionally slow months,” Villacorta said. “If the home buyer tax credit is extended and possibly expanded, it could add even more momentum through the slow months to build up to a very strong spring in 2010 as more buyers are sensing that home prices truly have hit the bottom of the current cycle.”
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