The U.S. closed 2011 with a 2.1% drop in home prices, according to new data released by Clear Capital, based in Truckee, Calif., which is forecasting a slight 0.2% gain in home prices for this year.
Last year's decrease was the smallest year-end change in either direction since the market gained 1.7% in 2006, according to Clear Capital. The majority of the downturn was early in the year through May, with upticks hitting during the summer buying season, and then remaining stable through the fall and early winter.
Regionally, the Northeast registered a tiny 0.1% yearly gain. The other regions saw price declines in 2011: -1.3% for the South, -3% for the Midwest and -4.4% for the West.
For this year, Clear Capital is forecasting continued stabilization with a very slight gain across all markets and projected stability in 20 out of 50 major metropolitan markets.
‘Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,’ says Dr. Alex Villacorta, director of research and analytics at Clear Capital. ‘With national prices down a little more than two percent for the year and sitting at their lowest point since 2001, our projections show that the current balance the market has found will continue through 2012.
‘However,’ Villacorta adds, ‘individual markets reacting to their local economic drivers exhibit a wide range of performance levels. Although the national numbers suggest markets are flat, when looking at individual metro markets, it turns out only 24 percent of them showed signs of stabilization in 2011, while the others are still moving more dramatically higher or lower. What's most interesting is that the lower segments of appreciating markets are driving much of the current price growth. In places like Florida, which have historically been hard hit, we are now seeing considerable activity in lower-end properties as demand continues to heat up.’
Separately, Clear Capital reports that home prices declined 0.4% in December on a quarter-over-quarter basis, showing the markets giving back some of the gains of the summer buying season. This is the first cooling off after six monthly reports showing minimal quarterly gains.