The Housing Market One or Two?

Analysts disagree over definition and future of the market

Last week, while some real estate analysts offered a somewhat rosy outlook regarding “stabilizing home prices for non-distressed property,” several industry experts from news sources argued that you cannot simply split the market in two pieces — distressed and non-distressed to paint the picture you want.

So what’s the bottom line? Is the market flat, dropping or rising?

Month over month, CoreLogic report that home prices overall fell 3.9 percent in October, and the S&P/Case-Shiller home price index was down 3.9 percent in September (which represents a three month running average of both distressed and non-distressed sales).

Removing the distressed sales(foreclosures and short sales) from CoreLogic’s analysis, however, home prices fell just 0.5 percent in October.

The Wall Street Journal noted that for the first nine months of 2011, non-distressed property prices were relatively stable, with only a two to three percent decline year over year. A real estate analyst from Barclays, a proponent of looking at the two market segments separately, feels that if the pricing trend continues (distressed pricing dropping while non-distressed pricing stabilizes), it could have the effect of “stabilizing something else: home-buyer confidence.” Only time will tell.

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