Home Price Monitor December 2011

National Association of REALTORS®

Research Division

Cutting Through the Noise: Various Home Price Measure

Highlights

• On a month-to-month basis home price declines in October were small except among non-distressed existing homes where there were small price gains and new homes, which saw larger monthly gains. On a year over year basis, small declines were seen across measures in October within the range that has been typical of recent months.

• NAR data show a monthly increase for November and suggest that the decline from November one year ago may be smaller than in October.

• New home prices continue to fluctuate greatly due to low levels of construction and purchase activity.

• Distressed sales, which hold back existing home prices, continue to comprise about 30 percent of sales—down from nearly 40 percent earlier in the year. The seasonal slowdown may lead to an increase in distressed sales as a share of total sales even as the number of distressed sales remains largely constant early in 2012. The increase in the share of distressed sales may bring reported transaction prices down somewhat.

Outlook

• Many of the same trends continue to dominate the outlook. Low inventories,

declining delinquency rates, and relatively stable buyer traffic should help to

support prices, though buyers searching for the right home may have fewer

options from which to choose. Very limited new construction means that

buyers initially searching for a new home may find more selection among

existing homes.

• Client pricing expectations may continue to present challenges. Data recently

released from the Profile of Home Buyers and Sellers show that sellers

typically sold their homes for 95% of the listing price, and 61% reduced the

asking price at least once.

• Affordability remains high and job opening and hiring data are showing signs

of improvement. An improving economy coupled with affordability could

not only provide a needed jolt to primary residence sales, but may also spur

investment and vacation home purchases. New NAR data on these types of

sales will be out in the first quarter of 2012.

Home Prices

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$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

$280,000

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NAR Median Sales Price: Total Existing Homes, United States ($)New 1-Family Houses: Median Sales Price (Dollars)FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100)S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100)S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100)CoreLogic National House Price Index (NSA, Jan.2000=100)

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Data – Year over Year Change

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

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NAR Median Sales Price: Total Existing Homes, United States ($)New 1-Family Houses: Median Sales Price (Dollars)FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100)S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100)S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100)CoreLogic National House Price Index (NSA, Jan.2000=100)

Home Price Changes

*All data are not seasonally adjusted. Monthly changes should typically be computed only for Seasonally Adjusted (SA) data. Because these change rates are often covered in the media regardless of their suitability for analysis, they are presented here but should be used with caution. Annual (yr-over-yr) changes computed for Not Seasonally Adjusted (NSA) data give a measure that is not affected by seasonal fluctuations.

Data Series

Oct-11

Monthly

Change*

Oct-11

Annual

Change*

Nov-11

Monthly

Change*

Nov-11

Annual

Change*

Next

Release

Date

NAR Median Sales Price: Total Existing Homes -2.7% -5.7% 2.1% -3.5% 20-Jan

NAR Median Sales Price: Existing 1-Family Homes -2.6% -6.1% 1.9% -4.0% 20-Jan

FHFA House Price Index: Purchase Only -0.4% -2.7% -- -- 25-Jan

S&P/Case-Shiller HPI: Composite 20 -1.2% -3.4% -- -- 31-Jan

S&P/Case-Shiller HPI: Composite 10 -1.1% -3.0% -- -- 31-Jan

CoreLogic National HPI -1.3% -3.9% -- -- Mid-Jan

CoreLogic National HPI - Distressed Excluded 0.4% -0.5% -- -- Mid-Jan

New 1-Family Houses: Median Sales Price 3.5% 9.0% -3.8% -2.5% 26-Jan

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Spread of Existing Home Price Changes Year over Year

Sources: NAR, Case-Shiller, CoreLogic, FHFA, HAVER

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Supply and Demand Factors – Inventory

Sources: NAR

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2.0

4.0

6.0

8.0

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

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4,500,000

5,000,000

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA)

NAR Months' Supply of Total Existing Homes, United States (Months)

NAR Months' Supply of Total Existing Homes, United States (Months) (right axis)

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA) (left axis)

Supply – New Housing Starts and Permits

Sources: Census

0

100

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500

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1,000

Housing Starts: 1 Unit (SAAR, Thous.Units) Housing Units Authorized: 1-Unit Structures (SAAR, Thous.Units)

Underlying Demand – Job Growth and Hires

Sources: BLS

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0

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Change in Total Nonfarm Employment (SA, Thous) JOLTS: Hires: Total (SA, Thous)

Potential Job Growth – Openings

Sources: BLS

0

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JOLTS: Job Openings: Total (SA, Thous)

Housing Affordability

Sources: NAR

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250.0

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NAR Housing Affordability: Payment as Percent of Income, U.S. (%)NAR Housing Affordability Index: Composite (Fixed + ARM), United States

NAR Housing Affordability Index: Composite (right axis)

NAR Payment as Percent of Income (left axis)

About the Price Data Series

Data Series Strengths/Weaknesses of Data Series

NAR Median Sales Price: Total Existing Homes

NAR Median Sales Price: Existing 1-Family Homes

FHFA House Price Index: Purchase Only

Weighted Repeat Sales (WRS) Index, sourced from Fannie/Freddie purchase &

refinance mortgages (excludes FHA, VA, Jumbo, Subprime)

S&P/Case-Shiller HPI: Composite 20

S&P/Case-Shiller HPI: Composite 10

CoreLogic National HPI

CoreLogic National HPI - Distressed Excluded

New 1-Family Houses: Median Sales Price Based on home builder interviews in the Survey of Construction

Most timely Data, broad geographic coverage, sourced from MLS and Realtor® board

data, data in dollars, total exisiting includes condos and coops

WRS Index, sourced from County recorder data, weighted by property value;

quarterly national index (not shown), monthly 10 and 20-city metro indexes and

composites are 3 month moving averages

Weighted Repeat Sales Index, sourced from database of loan servicing and County

recorder data

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER