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CoreLogic's Latest HPI Encapsulates 2011

by Chicago Agent

CoreLogic's December HPI, as in November, highlights the extraordinary impact of distressed sales on home values.

CoreLogic yesterday released its Home Price Index (HPI) for December, a survey of not only the pricing data for December but of the entire 2011 home value landscape.

Including distressed sales, the HPI reports a 4.7 percent decline in prices in 2011 compared to 2010, marking the fifth straight year that values have ended the year on the downside. As with past HPIs, though, distressed properties were a big part of those declines; when excluding distressed sales, home values were down just 0.9 percent in 2011.

On a monthly basis, values were down 1.4 percent from November to December, but again, once distressed home are excluded, the picture changes dramatically, as prices actually increased by 0.2 percent under such conditions.

Though not as widely-cited as Standard & Poor’s Case-Shiller survey, the HPI is used by a number of institutes and analysts in their research, most notably the Federal Reserve.

Mark Fleming, the chief economist for CoreLogic, emphasized the divergence of prices in his comments on the index.

“While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease,” he said. “Until distressed sales in the market recede, we will see continued downward pressure on prices.”

Other highlights of the report included: Including distressed sales, the five states with the highest appreciation were: Montana at 4.4 percent, Vermont at 4.0 percent, South Dakota at 3.1 percent, Nebraska at 2.5 percent and New York at 1.7 percent. On the depreciation side, the highest were Illinois at -11.3 percent, Nevada at -10.6 percent, Georgia at -8.3 percent, Ohio at -7.7 percent and Minnesota at -7.5 percent.

Illinois’ case, though, serves as a particularly notable example of the impact of distressed sales. When such sales are excluded, the state with the highest depreciation were Nevada, Minnesota, Arizona, Delaware and Michigan; once distressed properties are excluded, Illinois does not even crack the top five.

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