The CoreLogic Home Price Index for May 2011 was just released and there is a bit of good news to report. For the second consecutive month, month-over-month home prices increased. According to the report, home prices rose by 0.8 percent in May 2011 when compared to April 2011. This figure includes prices on distressed sales such as short sales and real estate owned (REO) properties.

While the month-over-month price rose, the year-over-year prices are down. When compared to May 2010, home prices in May 2011 dropped by 7.4 percent. If distressed sales are excluded from the data then the year-over-year decline was only 0.4 percent.

Several states led the pack including New York with a 4.4 percent appreciation in home prices, Vermont (+3.9 percent), North Dakota (+3.8 percent), Hawaii (+2.5 percent) and the District of Columbia (+0.5 percent).

Unfortunately some of the nations hardest hit areas continue to see home prices decline sharply including Idaho (-16.4 percent), Michigan (-12.9 percent), Arizona (-12.1 percent), Illinois (-11.8 percent) and Nevada (-11.6 percent).

The price growth was better when distressed sales data was removed. For example, prices rose by 9.0 percent in Hawaii and only depreciated by 7.0 percent in Arizona when short sales and REO properties were removed.

While a month-over-month increase in home prices is a bit of good news, that is really all it is – just a bit. Home prices have a long way to go. Since its peak in April 2006, home prices are down 32.7 percent. Unfortunately some areas won’t recover this decade so the wait for a rebound will be long for many.

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