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Home prices may be showing signs of stabilizing -- that is, if you remove distressed sales from the equation. When distressed sales are excluded from CoreLogic’s Home Price Index, home prices dropped only 0.4 percent from a year ago -- not 7.4 percent when all transactions are accounted for.
In its latest report, CoreLogic found that nondistressed median existing and new prices are returning to 2009 levels. However, median prices for short sale transactions and REOs are continuing to fall; prices for distressed sales have fallen 10 percent since 2009, the report notes.
On the other hand, a dwindling shadow inventory and a drop in new foreclosure auction notices over the past year could serve as positive signs of a rebound.
"Given that the recent declines in auction filings and current shadow inventory levels are the drivers of future distressed sales, the level of distressed sales should, all things equal, begin to decline late in 2011 and into 2012," the report said.
Residential shadow inventory is down nearly 20 percent from its peak, dropping to 1.7 million units in April 2011 compared to 1.9 million units a year ago.
Top Cities for REO Price Discounts
According to CoreLogic, as of April 2011, here are the top cities for REO price discounts:
- Miami: 62% REO price discount
- Chicago: 60% REO price discount
- St. Louis: 60% REO price discount
- West Palm Beach: 58% REO price discount