A rise in the percentage of real estate owned (REO) properties sold in February signals that home prices could start to decline over the next several months, according to a recent report from valuations services provider Clear Capital.
According to the firm’s Home Data Index (HDI) Market Report, national REO saturation – the percentage of REO properties sold as compared to all properties sold – ticked up 1.8 percentage points in February from 20.9% to 22.7%, compared to the previous rolling quarter (Sept.-Nov.), the largest gain since January 2012. This, combined with declining quarterly gains, suggest home prices could see quarterly declines by July.