DBJ... Home prices to fall in 2011

From Dayton Business Journal…

Home prices forecasted to fall in 2011

Thursday, January 6, 2011, 10:31am EST

Homes prices could continue to fall this year, if a forecast made by Clear Capital is correct.

National home prices will experience a 3.7 percent year-over-year drop this year, according to the company’s 2010 home data index market report — an analysis of the top 50 metro areas. While not as severe as the 4.1 percent year-over-year decline recorded in 2010, price declines are expected to continue as unemployment and real estate owned property levels remain high.

Housing prices will continue to fall but with more consistency than last year. In 2010, federal incentives offered to home buyers threw the housing market into a tailspin, creating periods of extremes in activity. In 2011, ebb and flow of home prices should be more gradual.

“In terms of home prices, this past year has certainly been characterized by uncertainty,” Dr. Alex Villacorta, Clear Capital senior statistician, said. “Tax incentives and high levels of distressed sale activity had counter effects on home prices which contributed to the fragility of the markets.”

Nationally, home prices increased 9.7 percent from late March to mid August and then decreased by 9.4 percent from September to December.

According to the report, the Dayton metropolitan area exemplified the market volatility of the past year, experiencing a 22.3 percent year-over-year average price drop in 2010, nearly double the 11.7 percent change expected in 2011.

Bob Wilson, president of the Dayton Area Board of Realtors, said the local housing market this should be fairly stable in terms of home value.

“I really don’t foresee much change in house values in Dayton, Ohio,” Wilson said.

He said that, despite the Clear Capital statistics, Dayton’s home prices in 2010 nearly matched those of 2009, a trend he expects to see continue into this year. Through November, the average price of a home locally was $123,560, compared to $123,417 during the same period in 2009, according to Ohio Association of Realtors statistics, which calculate Dayton housing data for Greene, Montgomery, Preble and Warren counties.

The data Clear Capital uses to rank metro areas reflects the housing activity within Clarke, Greene, Miami and Montgomery counties.

Clear Capital is a provider of data and solutions for real estate asset valu­ation and risk assessment for large financial services companies. The company’s customers include 75 percent of the largest U.S. banks, investment firms and other financial organizations.