Distressed sales account for large portion of home price drop

Distressed sales, including short sales and real estate owned transactions, accounted for a large portion of the drop in U.S. home prices in March, according to California-based information and analytics services company CoreLogic, which today released its Home Price Index for March 2011.

National home prices, including distressed sales, declined by 7.5 percent in March 2011 compared to March 2010, the report says, marking the drop of home prices for eight months straight. Excluding distressed sales, year-over-year prices declined by only 0.9 percent compared with March 2010, and 2 percent with February.

Mark Fleming, chief economist at CoreLogic, attributes this year’s disappointing start to the absence of the first-time homebuyer’s tax credit, which, he says, artificially supported last year’s prices.

Including distressed sales, states with the highest appreciation in home prices included New York, which was up 3.5 percent in March. Florida is named as one of the hardest hit states with a 10.6 percent price depreciation, according to the data. In Miami, Miami Beach-Kendall home prices declined by 12.79 percent from March 2010.

Another report by Zillow.com today indicated prices are down 29.5 percent since June 2006 and would continue to fall until at least 2012. The CoreLogic data is based on price, time between sales, property type and loan type. TRD