Home Prices Drop to Record Lows in April

By Kyle Chezum Updated on 5/5/2011

 

Before April of this year, home prices had hit their lowest point in March of 2009.  But April brought with it a surge of distressed property sales that pushed the average price down to a level never seen before.  Clear Capital, a real estate industry analytics group, released a report outlining the state of property values across the nation.  The findings?  Home prices are down everywhere.

Clear Capital made the bold and disturbing statement that "markets have entered uncharted territory."  Prices have not been this low in a long time.  April home prices fell 5% below home prices tracked just one year ago and 5% below prices seen in the previous months.

It's not difficult to track the reason for the price decrease.  Distressed property sales account for 34.5% of all home sales, a significantly higher percentage today than in previous years, even during the financial crisis.  In 2010, distressed property sales made up just 20% of all sales.  Clear Capital reports, "With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales."

Spring typically brings a surge in home purchases.  This surge has not yet arrived, nor has demand begun to influence home prices.  In the coming several months, which are typically hottest for real estate markets across the nation, we can expect to see more purchase activity and probably higher prices.  But the overall trend, at present, is downward.