Distressed Sales Lead to 4.7 Percent Drop in 2011 Home Prices

February 2, 2012

Distressed home sales led to a 4.7 percent decrease in home prices in 2011 compared to the prior year, according to CoreLogic’s latest Home Price Index report.

This is the fifth consecutive year with a decrease in the HPI. However, excluding distressed sales, the report shows that home prices decreased by 0.9 percent in 2011, giving an indication of the impact of distressed sales on home prices in 2011.

The report also shows that national home prices including distressed sales decreased 1.4 percent on a month-over-month basis, the fifth consecutive monthly decline. However, the HPI excluding distressed sales posted its first month-over-month gain since July 2011, rising 0.2 percent.

The December drop in home prices follows a decline of 4.3 percent in November 2011 compared to November 2010. Excluding distressed sales, year-over-year prices declined by 2.0 percent in November 2011 compared to November 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices,” said Mark Fleming, chief economist for CoreLogic.

Report Highlights:

  • Including distressed sales, the five states with the highest appreciation were: Montana (+4.4 percent), Vermont (+4.0 percent), South Dakota (+3.1 percent), Nebraska (+2.5 percent) and New York (+1.7 percent).
  • Including distressed sales, the five states with the greatest depreciation were: Illinois (-11.3 percent), Nevada (-10.6 percent), Georgia (-8.3 percent), Ohio (-7.7 percent), and Minnesota (-7.5 percent).
  • Excluding distressed sales, the five states with the highest appreciation were: Montana (+7.7 percent), South Dakota (+3.5 percent), Indiana (+3.3 percent), Alaska (+3.1 percent), and Massachusetts (+2.9 percent).
  • Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-9.7 percent), Minnesota (-5.2 percent), Arizona (-4.9 percent), Delaware (-4.2 percent) and Michigan (-3.5 percent).
  • Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2011) was -33.7 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -24.0 percent.
  • The five states with the largest peak-to-current declines including distressed transactions are Nevada (-60.0 percent), Arizona (-51.9 percent), Florida (-50 percent), Michigan (-43.7 percent), and California (-43.5 percent).
  • Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 81 are showing year-over-year declines in December, one more than in November.


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro is the nation's leading provider of closing and title software, consistently pushing the technological envelope to pioneer the most powerful and comprehensive closing and title automation software on the market. SoftPro's Award-Winning Software combines cutting-edge technology with outstanding support to make your business more productive, efficient and boost your revenue. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.