The effects of winter are unfolding and as the fiscal cliff draws closer, 2012's housing market momentum is most at risk, it says in its latest report.
National quarterly price gains were more than halved in November over the month, coming in at just 1.0%. While a slowdown in growth is typical in the winter due to fewer fair market sellers listing their homes, the percentage of REO sales held steady at 18.4%. Should the rate of distressed sales hold steady over the next several months, downward price pressure should be minimal, said Alex Villacorta, director of research and analytics at Clear Capital.
The seasonal effects of winter also started to take hold in three out of four regions. A pull back in growth at similar magnitudes was echoed in the West, South, and Northeast, with quarterly gains of 2.0%, 0.8%, and 0.3%, respectively.
The Midwest was the only region to hold the momentum of quarterly growth over October. However, at just 0.9%, the region is in line with the level of growth across the regions and at the national level.
Price gain stalls are not as evident in yearly price trends. National yearly home prices in November held their ground with 4.6% growth. Putting the recovery into perspective, this time last year, national home prices had declined 2.8%. The South also mostly held its ground, with gains of 4.0% over the last year.
The West continued to lead the recovery, yet with softer yearly gains of 10.3% in November, over October's yearly growth of 11.4%. The region continued to make progress in that REO saturation declined to just 17.8%. Since the peak in 2009, REO saturation has fallen by more than half.
The Northeast posted just 1.4% growth year on year, constrained by nearly flat quarterly gains. The region also saw price trends flat in the top tier sector, or homes selling for $423,000 and more.
The Midwest bucked the trend of softening gains, and posted yearly growth of 2.9% in November. While the Midwest hinted at a slowdown in October, things appear to be picking back up. We continue to expect volatility out of the Midwest moving into the deeper winter months. The region typically exhibits price fluctuations, as it represents the lowest median prices of any of the four regions.
The highest performing markets exhibited similar trends to those at the national and regional levels, where the range of quarterly gains were reduced by more than half. Yearly price changes continued to be mixed. Average REO saturation for the highest markets of 25% in November was 6.6% higher than the national average.
Villacorta said that markets like Detroit, Las Vegas, Tucson, and Atlanta are great examples of markets seeing growth alongside declining, yet...