The Clear Capital report reflected that despite the remarkable surge of top 15 metro areas REOs in February, these areas still are in the average range of gains or mostly stable home prices as compared to the previous month’s report. Distressed properties are said to have a downward pull on prices of nearby homes.
Progress in the job market, an increase in consumer confidence, and a rise in activity among investors making cash purchases may be aiding the upward pull on home prices and “could be in play with the resiliency we’re seeing in prices against increasing REO this month,” as commented by Alex Villacorta, Clear Capital’s director of research and analytics.
In 10 months, the smallest margin drop of national home prices was reached, a 1.9 percent year-over-year, as reported by Clear Capital’s March housing report.
Villacorta said, “Home prices across the nation saw light levels of depreciation in February, consistent with the trend we have seen over the last several months… However, the Northeast, Midwest, and West improved performance against last month’s quarterly declines in light of increases in REO saturation, which is unusual and encouraging.”
Due to the increase of REO activity, Villacorta noted that, “we’ll be keeping a very close eye on the effects of the attorneys general settlement with servicers, as it could dramatically change the flow of REO properties moving through the foreclosure process and significantly impact values in the near future.”