Sep
9
Home prices gained 5.7% over the three months ending in August, according to real estate data provider Clear Capital. But analysts added price growth has slowed and will drop to a new low in 2011.
The price gain through August is down 240 basis points from the July report, which dropped 70 bps from June. Alex Villacorta, senior statistician at Clear Capital, said prices built up a 13% cushion from its trough in 2009.
“Overall, prices look poised to continue their deceleration with a likely drop into negative territory by the end of the year,” Villacorta said.
With the drastic drop in home sales shown in July, prices will continue to soften and drop below 2009 levels next year.
Drilling down to the metropolitan statistical areas (MSAs), many of the 15 highest performing markets showed double-digit quarterly gains through August. Home prices in San Diego increased 11.2% above levels seen a year ago, but most of the improved areas were in the Midwest and South regions.
Conversely, 11 of the previously top-performing markets showed accelerating declines. New Orleans, Cleveland and Columbus had prices fall by more than 7%.
“The interesting part about all of these markets is that for the first time, the local markets are left to their own devices,” Villacorta said.
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