Home Prices: A Tale of Two Markets

During the first 6 weeks of 2008, Houston home prices averaged 2% less than during the same time period last year. This is the first sign of price decline regionally, but the decline is nowhere near the double digit declines seen in other major U.S. cities. However, a closer look at the local numbers shows prices of non-foreclosure homes are still up, though only a meager 1%. On the other hand, foreclosed homes sold so far in 2008 have seen prices fall nearly 10%. What's somewhat troubling in this data is that foreclosures constituted nearly 30% of all regional sales. If that ratio doesn't come down soon, the “foreclosure market” is bound to have a more profound effect upon the overall housing market.