Area home prices decreased slightly last year when compared to 2010, but home sales have kicked off the New Year with a bang.
In Nashville-Davidson--Murfreesboro--Franklin, home prices, including distressed sales, declined by 1.1 percent in December 2011 compared to December 2010, according to data released by CoreLogic, a provider of information, analytics and business services.
Excluding distressed sales, year-over-year prices increased by 0.6 percent during the same time.
These figures are significantly better than national data. According to the same Home Price Index report, home prices in the U.S., including distressed sales, decreased 4.7 percent in 2011, compared to December 2010.
“This year-end report shows that home prices continued the trend of year-end decreases; this is the fifth consecutive year with a decrease in HPI,” the report states.
Excluding distressed sales, home prices decreased by 0.9 percent in 2011, giving an indication of the impact of distressed sales on home prices last year.
Tennessee’s data fared in between to the two extremes with a 1.7 percent decrease including distressed sales and a 0.1 percent decrease excluding distressed sales.
“While overall prices (in the U.S.) declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices,” says Mark Fleming, chief economist for CoreLogic.
Prices may be down slightly, but the decrease isn’t stopping qualified homebuyers from purchasing.
Home sales in Rutherford County were up last month over January 2010, according to The Red Report, which is released monthly by Rutherford County-based Red Realty.
Closings increased by 8 percent, while the average closed price was down 5 percent, according to Red Realty President Steven Dotson.
“The January to January comparisons are positive signs the market is slowly improving,” he wrote in the report. “Last year was the first full year without any temporary tax incentives, so this year we should be able to fairly compare 2012 to 2011.”
As the year progresses, Dotson says he will begin tracking the year-to-date numbers, which will provide a more accurate picture of the real improvements.
“So far, I think January’s closings and pendings showed us 2012 will be an improvement over 2011 and 2010,” he said, referring to the 253 pending sales last month.
Local mortgage expert Shawn Kaplan said activity has been up since Christmastime. Mortgage rates have inched down, and the number of showings and contracts have increased.
“Activity creates results,” he said. “We didn’t have this in September, October and November.”
Kaplan added that financing is still accessible and typically require a 650 credit score, proof of steady income and a sizeable downpayment.
He pointed out that self-employed and commission-based applicants often cannot prove steady and reliable income and are left sitting on the sidelines.