CU Data

December Home Prices Hit Record Low for 2010

Don’t expect prices to rebound until the supply of foreclosed properties is exhausted.

March 01, 2011
KEYWORDS foreclosure , home , sales
/ PRINT / ShareShare / Text Size +

Despite recent upbeat data on new and existing home sales, U.S. home prices continued to decline in December due in part to increased sales of foreclosed properties, according to the FNC Residential Price Index™ (RPI).

Driven in part by rising sales of distressed properties and higher foreclosure-sales discounts, home prices declined for the seventh straight month in December and suffered their largest one-month drop during the year.

As markets approach new lows, the 2010 year-end home prices are now down more than 3.4% from January.

Of 30 major metropolitan markets tracked, 23 experienced price declines in December that averaged about 2.2%. Home prices in Atlanta, Chicago, Las Vegas, Orlando, and Phoenix continue to drop year-over-year at rates in the double digits.

Meanwhile, San Diego, Los Angeles, and San Francisco markets have been among the best performing markets during the year, rising 5.1%, 7.8%, and 8.1%, respectively, from a year ago.

The three California markets continue to enjoy strong year-over-year growth despite the absence of a tax credit in the second half of the year—in stark contrast to many faltering recoveries among markets where the median price decline stood at about -2.9%.

The deteriorating trends in home prices arise, in part, from increased sales of foreclosed properties. As a percentage of total home sales (both new and existing homes), sales of distressed properties have increased steadily in recent months, rising from 23.5% in the second quarter of 2010 to 25.5% and 26.8% in the third and fourth quarters, respectively.

This increase occurred despite a temporary halt in foreclosures by several major lenders concerned with potential legal implications of claims regarding insufficient due diligence. In the meantime, the foreclosure sales discount increased from about 36.5% in the second quarter to 39.2% and 40.8% in the third and fourth quarters, respectively.

More foreclosure sales are expected since various lenders announced in December that they would resume the process. Accordingly, the FNC RPI anticipates further downward pressure on home prices in the coming months.

There is an upside: This trend will reduce the surplus of distressed properties and eventually bring the supply to levels in line with weak housing demand, paving the way for a more sustainable housing recovery later.

The Residential Price Index, created by the mortgage technology company FNC.

Post a comment to this story


What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive