Declining home values may not be tied solely to foreclosures

The 3.7 and 1 percent declines in the median home price in January and December year-over-year data may not be the direct result of an increasing number of foreclosures, according to the Atlantic.

The home price data, taken from the National Association of Realtors, was compared with RealtyTrac's recently released foreclosure data for December, in an effort to determine if NAR's claim that "unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts" were to blame for the home value decrease was accurate.

However, the Atlantic argues this may be inaccurate for a number of reasons. The percentage of home sales that have been due to foreclosures has remained relatively steady, so the argument that a dip in home prices is resulting from a spike in foreclosure rates may not follow. The actual sale price for foreclosed properties has also remained steady, limiting the possibility that less expensive bank-owned properties are causing the price decrease.

The source does concede that there are some caveats to their argument, namely that January foreclosure data has not yet been released and may deviate from past months and RealtyTrac and NAR may disagree on their data information.

Although this argument cannot yet be verified, some considering moving may be able to use this information when trying to determine how close house prices are to reaching their lowest values.  

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