The housing bust obviously depressed the real estate market, but a new study shows that a big jump in distressed sales during the worst of the downturn may have exaggerated swings in at least one key measure of house prices.
Federal Housing Finance Agency
economists William Doerner and Andrew Leventis examined markets in Miami and Tampa, Fla., to gauge the impact of bank-owned property and short sales on the FHFA’s house price index.
The findings, released in a new paper: distressed sales dragged the index down as housing bottomed out and now are boosting numbers a bit.
“The presence of distressed sales in the standard HPI had a depressing effect on measured price changes. In more recent periods, when distressed sales comprised a shrinking percentage of real estate transactions, the Working Paper reveals the opposite effect. As the ‘weight’ of distressed sales on the standard index decreased in recent periods, the depressing effect lessened over time. This meant that the price appreciation observed in the standard FHFA index was somewhat above what the distress-free measures reported.”
The FHFA’s index is one of several measures that the industry and economists use to gauge the health of the real estate market. The latest data, released July 23, showed that house prices appreciated a seasonally adjusted 0.7% in May from the prior month — the 16th consecutive increase. The report reinforced views that the housing market is rebounding.
The study by Messrs. Doerner and Leventis doesn’t change that. But it does point to some distortion in the index through boom-and-bust cycles.
In the late 1990s, for example, distressed sales in the Miami and Tampa markets tended to price about 10%-15% less than normal sales. As the housing boom accelerated, the discount shrank to 5% and 10%. But from 2007 to 2010, that figure jumped to near 30%.
“In recent quarters, with the onset of the recovery and rising home prices, such discounts have become slightly more modest. In the first quarter of 2013, for instance, the average discount was about 25%,” the authors write.
The paper cautions that the results for Miami and Tampa might not be duplicated in areas that experienced a less dramatic crash or saw fewer distressed sales.
Enjoy a guided tour of Wildflower Island, Teatown’s unique two-acre sanctuary that is home to over 230 species of wildflowers and shrubs native to our area.
Recapture your camp days and reconnect with former camp friends at Teatown’s first camp alumni event! The event is free of charge and open to all camp alumni who have aged out (age 15 and over), counselors and their families. A pizza truck will serve food, beer and soda. Live music will add to the festivities, as well as guided hikes along the Teatown trails.
in the City of Light with a seven night stay in a charming, private, Parisian apartment on Rue de l’Eperon in the Saint Germain des Pres neighborhood (6th arrondissement), 
close to the Seine and within walking distance to all of Paris.
Spend a week surrounded by history in a private London flat featuring 2 bedrooms, a full kitchen, living 
room and dining room. Located on Duke St., St. James, this flat is perfectly situated to explore London.
at types of moths and other insects will we find on this evening program? Join Charlie Roberto to discover these creatures of the night. Meet at Teatown’s Cliffdale Farm, Teatown Road, Croton-on-Hudson. FREE.
On August 1, an adorable black and white rabbit was left abandoned in a cage by the basement door of Teatown. Sadly, after examination, it was determined that the bunny suffered a traumatic leg break sometime in the past that did not receive any care and healed improperly. This sobering case reminds all of us to think carefully about the responsibility of caring for a pet.
engers are an important part of nature’s clean-up crew. Come meet a couple of Teatown’s animal scavengers.
Another year of Teatown camp has drawn to a close. It’s been a wonderful summer and our campers learned a great deal about the world around them. From setting camera traps to making art from weeds and thorns to exploring new trails and getting an up-close view at native animals, it’s been an adventure and dis
covery-filled summer.