The West Pulls Down National Home Prices in the First Quarter

These days, the housing market would be pretty content to hear anything resembling good news. Unfortunately, the latest home prices report for the first quarter of 2010 from housing industry consulting firm Clear Capital provides only a little. It says home prices declined by 1.3% nationally in the first quarter. The decline was the same quarter-over-quarter and year-over-year. The lukewarm news: this is a smaller decline than the market saw in the fourth quarter, when prices dropped by 3.9%. It's also slightly better than the quarter prior's decline of 1.6%. There are a few other glimmers of sunshine in the report, but in general, the housing market still has further to go before it stabilizes nationally.

The neatest, and yet most depressing, chart in the report shows how home prices have changed since 2006:

You can see that prices in the West and Midwest have dropped the most, each down around 50% from their 2006 levels, though prices in the Midwest appear to be stabilizing above their 2009 lows. Prices in the Northeast are only down a little over 20%, while prices in the South are off by about one-third. That all translates to a national decline of around 40%.

Although it isn't that easy to see form this chart, first quarter performance varied somewhat widely by region. According to Clear Capital, the only region where prices declined significantly was the West. Prices there fell 4.3% from the fourth quarter of last year. The report says:

The West region broke through its prior 2009 low point, becoming the first region to double dip. This places home prices in the West at their lowest point since 2001 and reflects the continuing price declines among most key markets in this region.

Meanwhile, prices were completely flat in the South and Midwest, and declined just 0.5% in the Northeast, quarter-over-quarter. This appears to imply that prices could be stabilizing in many areas, though even within the regions with little or no price decline, some metropolitan areas saw prices continue to drop.

In fact, Clear Capital provides some data on metro area performance. Here are the worst:

Obviously, these areas are far underperforming the rest of the nation. Apparently neither the improvement in auto sales nor the recent decline in Michigan's unemployment rate is doing enough to help stabilize home prices in Detroit.

And here are the areas where home prices performed the best:

The only real surprise here is Orlando. Despite so many home prices in Florida continuing to fall, they managed not only to increase in Orlando, but to rise enough to break into the top 10. Perhaps the recovery in the tourism industry is helping to boost home prices there.

So the housing market continued to struggle last quarter overall. But prices aren't falling as quickly nationally as they were late last year. In fact, some areas are beginning to stabilize.