Friday, October 21, 2011

Two other home price indices for Denver: RPX and FNC

We follow various home price indices as well as the Metrolist data, as can be seen here.

There are other additional home price indices as well. Two more were released today, with both reinforcing the general trends we've already identified. Namely, home prices continue to fall slowly in the range of 3 to 5 percent, while home sales transactions in 2011 will be similar to 2010 totals.

Both indices contain information specific to the Denver metro real estate market, and both show continued declines in home prices.

According to the RPX index, found online here:

The year-over-year change in the composite price index (which includes 25 metro areas), continued to be negative and was down 4.7 percent during August 2011 compared to August 2010.

In the Denver area, the change during the same period was negative 3.2 percent, which placed it seventh among the 25 metro areas included in the index. The only metro areas that showed increases were Washington, DC, Detroit and Boston.

The 25-city composite index was also down from July 2011 to August 2011, with a drop of 0.8 percent. In the Denver area, the price index dropped 0.4 percent during the same period.

According to the report, this signals that seasonal price declines have already begun, and notes that prices are likely to decline through the end of the year.

The RPX report also provides information on home sales, and also noted that sales totals have begun to move toward winter lows.

As we noted with our discussion of Metrolist data, found here, there is likely to be a similar number of sales transactions this year compared to last year. This is in spite of last year's bump in buying due to the tax credit. As noted in the RPX report:

"If home sales decline according to their typical seasonal pattern, the year-over-year gain will disappear by year end."

The year-over-year change in transactions was +13 percent in the 25 metro area composite index. In the Denver area, the change was +16.2 percent during the same period. This places Denver as 10th among the 25 metro areas in percentage change. In Boston, for example, the change in transaction totals was 48 percent, year-over-year.

As metro markets headed toward winter lows in transaction counts, the composite index fell 16 percent from July to August. In the Denver area, transaction counts dropped 8.9 percent during the same period.

The FNC home price index was also released and showed a year-over-year change of 2.2 percent in home prices. This places it 24th among the 30 metro areas contained in the report. In other words, home prices fell more in the Denver area than in most of the other metro areas recorded by FNC.

FNC showed the comparative position of the Denver area as being somewhat worse than some other reports such as Case-Shiller. Case-Shiller often shows the Denver areas as having the 4th or 5th highest increase in home prices among 20 metro areas.

According to the FNC report, the decline in prices occurred in spite of a year-over-year increase in home sales transactions. We found this to be the case in the Metrolist data as well.

According to the FNC report:

Oxford, Miss. (October 20, 2011) – FNC’s latest Residential Price Index, released Thursday, indicates U.S. home prices declined in August despite strong existing home sales during the month. This decline reverses a modest fourth-month long seasonal uptrend. Amid weak economic fundamentals, home prices -- as well as a number of key leading housing indicators including new housing starts and building permits -- signal a likely scenario of continued housing weakness in the months ahead.

For a complete listing of recent home price articles, see here.