On April 22, First American CoreLogic, a leader in residential mortgage data and analytics for the mortgage industry, released its February 2008 LoanPerformance Home Price Index (HPI). The LoanPerformance HPI “provides a comprehensive set of monthly home price indices and median sales prices covering 7,508 ZIP codes, 957 Core Based Statistical Areas (CBSA) and 670 counties located in all 50 states and the District of Columbia.” The indices are the most comprehensive available in the industry.
According to their LoanPerformance HPI criteria, 36 states experienced a housing price decline over the three month period which ended with February 2008. The Minneapolis, St. Paul, Bloomington Core Based Statistical Area experienced a 3 month decline of 4.6% and an annual decline in house prices of 8.98%. The LoanPerformance HPI data indicates that thirty-three states now show year-over-year real estate declines. On a quarter-over-quarter basis, the number of states with decreasing property values increases to thirty-eight states.
Not surprisingly, many areas on the list with the highest drops in property values are in California and Florida. The state of Texas had several areas where real estate property values have been climbing slowly. The full available statistics and press release can be found here.
Also on April 22, the Office of Federal Housing Enterprise Oversight also sent out a press release regarding its monthly House Price Index. The OFHEO monthly index is calculated using the purchase prices of home mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. Because of this, the OFHEO HPI is based on homes that cost $417,000 or less. According to OFHEO, U.S. home sales prices fell 2.4 percent for the 12 month period ending in February. Since its peak in April 2007, the index is down 3.1 percent.
These two reports offer slightly different views of the real estate market on a national scale. Part of this anomaly is because of the different methods by which the data is collected. Also, because the data analyzed is obviously different, as the OFHEO is only taking into account relatively less expensive homes. Of course, there are many homes in the Twin Cities metro area which are priced well above this mark and do not qualify for loans backed by Fanny Mae or Freddie Mac. Therefore, these home sales are not factored into the OFHEO figures.
Remember, these reports are national figures on housing trends as a whole and are not representative of every market. They don’t take into account the hot markets where sales and home sale prices are actually increasing because over-all, the market is down. Knowing your local market is very important. A good source of local real estate market information is the Minneapolis Area Association of Realtors 100+ Market Update, which analyzes data in 205 local Twin Cities communities.
It might not make a lot of sense at first, but this blog uses that report as a reference quite regularly. You can see the previous posts which offer summaries of Minneapolis and St. Paul market activity for the month of March as well as the year to date.