Home prices in Middle Tennessee will continue to show year-over-year drops well into the second half of 2010, according to a new report from industry researcher First American CoreLogic.
The firm’s projections show that, come next August, area home values will be down 1.6 percent from this past summer. Tennessee as a whole will show a similar negative number 10 months from now, First American says, and will trail national home prices, which are expected to have risen 4.6 percent year over year.
That Nashville is expected to lag the nation’s housing recovery is the flip side of the fact that home prices in this region haven’t fallen as steeply: In the year ended this past August, Middle Tennessee prices were off 6.8 percent versus 10.1 percent for the country as a whole.
First American’s numbers assume that the homebuyers’ tax credit now helping spur sales will not be continued into next year. Combined with a further rise in foreclosures this winter, prices are expected to drop until March, when they will start a slow recovery. Leading the way then will be California and Florida, where home prices are expected to be up more than 7 percent by next August.
Other tidbits from First American’s research:
• Five states bordering Tennessee – Alabama, Arkansas, Georgia, Kentucky and Virginia – are expected to show higher home prices by next August. With a 4.1 percent rise, Virginia is seen as leading that pack.
• Of the nation’s 10 largest housing markets, only Philadelphia is expected to still be in negative price territory next summer. The Los Angeles and Miami markets are forecast to show gains of more than 6 percent.
• When national home prices hit bottom in March, the peak-to-trough drop will have been 37 percent.