All Real Estate Is Local, But...

Real Estate Broker/Owner

The NAR published their quarterly metro home value report this past week.  While there were some bright spots like Elmira, NY, which showed 11.3% year over year appreciation, there is also continued systemic weakness throughout our countries housing markets.

Broadly speaking, the median home value fell -15.6% from the 2Q of 2008 to the 2Q of 2009, this is the steepest decline on record for this quarterly report.

Additionally, all four regions within the United States were down.  The Northeast, Midwest, South, and West experienced home value declines of -9.7%, -8.6%, -10.3%, and -26.6% respectively.  While all real estate is local, every corner of the country is being impacted by eroding property values, every American is being affected.

Digging deeper, of the 155 metros that the NAR reported on, only 26 of them, or approximately 17% of them, showed year over year price increases in home values.  While this is an improvement from the previous quarter when only 10% of the markets showed increases, the broader home value trend is still deteriorating.

Here is a look at the past several quarters and the year over year home value declines according to the NAR quarterly metro report.

2Q 2007: -1.5%

3Q 2007: -2.0%  

4Q 2007: -5.8%

1Q 2008: -7.7%

2Q 2008: -7.7%

3Q 2008: -9.0%

4Q 2008: -12.4%

1Q 2009: -13.8%

2Q 2009: -15.6% 

While there is debate about the potential for home sales to have bottomed, what continues to be overlooked is that the number of foreclosure filings continue to set new records.  In the absence of a meaningful surge in demand to absorb these foreclosures, home values will continue to deteriorate as this report shows.  

Comments (4)

Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Mark

Thanks for the update, it's helpful.

Good luck and success.

Lou Ludwig

Aug 18, 2009 01:51 AM
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

Mark you are not supposed to interpret the data, you are supposed to take and run with it like everyone else in real estate.  Wellness in our business is not counted by one month of increases, but rather 6 months of increase in the same direction....up!  Then we have a trend.  As you mentioned the other day they are comparing a month in the spring to a month in November, and that is more than misleading, that is propaganda!

According to Marrian Websters online Dictionary here is a definition of 'propaganda.'

"...the spreading of ideas, information, or rumor for the purpose of helping or injuring an institution, a cause, or a person."

Aug 18, 2009 02:34 PM
Eric Murrietta
Homeowners Financial Group USA, LLC - Scottsdale, AZ

Still not seeing the increase.  Guess time will tell with those foreclosures.

Aug 19, 2009 11:02 AM
Mark MacKenzie
Phoenix, AZ

Lou:  Thanks!

Jim:  Propaganda indeed from the media and Wall St.  These numbers do not support any of the green shoots that Wall St. has been rallying on.

Eric:  The fact that the year over year decline in home values is still rising is a concern.  If we are indeed in a recovery mode, the year over year decline should start lessening, we have not seen this yet.

Aug 20, 2009 12:55 AM