New Challenges for Pound Ridge NY Real Estate | Pound Ridge NY Homes

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Not only did April data confirm the double dip in home prices nationally, real estate markets now have entered “uncharted territory” with the absence of a tax credit incentive for the first time in three years and are still falling.

 That’s the bottom line from Clear Capital, whose latest report foundd that national quarterly home prices fell 4.9 percent while year-over-year national prices declined 5.0 percent. 

“A note of caution to those looking for a strong end to 2011,” said the report.  “The last time no incentives were in place and distressed inventories were this high, home prices fell sharply.”

National home prices have fallen 11.5 percent over the previous nine-month period, a rate of decline not experienced since 2008.  All the nation’s major Metropolitan Statistical Areas (MSA) tracked in this month’s report showed quarter-over-quarter price declines. 

 A major factor is the price free fall is the national REO saturation rate, which reached reaches 34.5 percent after it declined to near 20 percent in mid-2010. The report noted that 2008 saw REO saturation grew similarly from the near 20 percent early in the year to 32 percent by the end of 2008.

 ”The latest data through April shows a continued increase in the proportion of distressed sales that are taking hold in markets nationwide,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales.

“In light of the compounding effects of winter’s seasonal slowdown and  I increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season,” added Villacorta.

The report noted that the trends of 2008 were quickly reversed with the introduction of stimulus measures. However, home prices today are already down nearly 25 percent since the 2008 period, creating increasing home affordability, in addition to gradually improving employment measures. Unlike the 2008 period where the downward trend ended in the winter, we’re now heading into the home buying seasons of spring and summer. Regardless, the housing market still faces many challenges that will only be solved through increased buying activity or a reduction in the distressed segment-neither of which is assured in 2011.


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