Despite escalating resales of foreclosed homes at significant discounts, the value of existing homes for sale experienced only moderate erosion nationwide during the quarter ended June 30. This morning, the Office of Federal Housing Enterprise Oversight (OFHEO) released its quarterly index of seasonally adjusted house prices, which was 1.36 percent below the first quarter of this year, and 4.8 percent below the same quarter in 2007. That decline is the first in 11 quarters, and the second largest in the Index's 17-year history.

When OFHEO factors refinanced mortgages into its calculations, its data show only a 1.7 percent decline in prices over a 12-month period, although this varies widely by region: the all-transactions price index for the Pacific region saw a year-to-year decline of 10.1 percent, whereas the West South Central, East North Central, and East South Central all enjoyed price appreciation during this period.

OFHEO’s index, which is based on data provided by Fannie Mae and Freddie Mac of purchases in 50 states and 292 metro areas, is in marked contrast to this morning’s release of the S&P/Case-Schiller Index, which tracks existing home prices in 20 of the country’s largest metros. That index for June showed a 15.8 percent drop-off from the same month a year ago.

James Lockhart, OFHEO’s director, noted in a prepared statement that the majority of the country’s Metropolitan Statistical Areas have posted positive four-quarter growth in their existing home prices. Prices actually increased in 12 states, on a year-to-year basis, led by Oklahoma (4.9 percent), Wyoming (4.4 percent), South Dakota (3.8 percent), North Carolina (3.6 percent), and North Dakota (3.6 percent). However, Pacific Census Division prices were down 15.6 percent from their peaks in early 2007. (Of the 20 cities with the greatest price declines, all but one — Las Vegas — is in California. The MSAs with the sharpest dips over the year were Merced, (-34.5 percent), Stockton (-31.7 pecent) and Modesto (-28.5 percent.))

“The most overbuilt areas of the country — including California, Nevada, Arizona, and Florida — contrast greatly with most other states, where prices are declining more moderately or even increasing,” observed OFHEO’s chief economist Patrick Lawler. “Nationally, the substantial declines in the weakest markets have driven seasonally adjusted prices down to late-2005 levels.”

While the OFHEO and the S&P/Case-Schiller Index differ in their methodologies and scope, a comparison of their respective findings indicates that they might not be that far apart from each other as some industry watchers claim. This comparison, though, calls attention to what many builders and analysts have long contended: that no one really knows for sure what’s going on with house prices in the U.S., especially with foreclosures playing such a large role on what’s selling and for how much.

Take Las Vegas: OFHEO estimates that home prices there (including refinancings) dipped by 17.7 percent in the latest quarter, compared to the same period a year ago. The Case-Schiller data show that June prices for existing homes in Vegas were off 28.6 percent compared to June 2007. In Phoenix, OFHEO’s quarterly index is down 11.1 percent, whereas Case-Schiller’s Index for June declined 27.9 percent. The two indices find somewhat commoner ground in less-volatile markets such as Dallas, where OFHEO’s index was up 2.05 percent, and Case-Schiller’s index was down 3.2 percent.

Learn more about markets featured in this article: Phoenix, AZ.