Property prices rise across US with hardest hit areas positive for first time

Residential property prices across the US continued to increase in September, but at a slower rate according to the latest published index.

The monthly home data index survey from Clear Capital shows price gains of 6.3% in September, down slightly from the 7.3% increase in August. It also showed that the price increases are across the country and not confined to specific regions.

The year-on-year decline in property prices is now 9.9%, the first time it has reached single figures since the summer of 2007. ‘As anticipated, the strong gains we’ve been experiencing this summer are showing signs of softening. Growth though remains sufficiently strong, providing hope as we head into a winter that will test the strength of the recovery,’ said Kevin Marshall, Clear Capital president.

Prices in the Midwest gained 13.3% over the last quarter, bringing its yearly loss to just 9.1%. The quarterly gain in the South was 5.2%, giving it an annual price loss of 8% while the Northeast of the country gained 4.5%, taking its yearly price decline down to 8.2%. In the West prices rose 2.9% over the quarter but its yearly loss is 16.2%.

The national real estate-owned (REO) saturation rate, which is the percentage of  REO properties sold compared to all sales in the last quarter, fell to 28.6% from last month’s quarterly value of 30.1%. The 1.5% decline is a slower rate than the 3.2% drop in August. The saturation rate is still 12.3% lower than the rate seen last winter.

‘Amid these conditions, it’s notable that the recent price gains have occurred alongside a record number of REO sales, indicating that the reductions in REO saturation has been caused by non-REO sale volumes outpacing the growth in REO sales. This demand for the non-REO segment is important if a broad recovery is to be sustained,’ the report says.

It also shows that some areas that have been badly hit by the rising number of foreclosures are showing positive quarterly gains for the first time, most notably Riverside in California and Orlando in Florida up 0.5% and 1.2% respectively.

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