US property prices fell by 0.4 per cent in August from the previous month, according to August’s Home Price Index. The decline, which is the first drop in four months, suggests that worries about a double-dip recession are perhaps justified, but distressed property sales are masking the true figures.

Overall, the year on year change in house prices has seen values fall by 4.4 per cent. But if you exclude distressed property sales from the figures, including short sales, the reduction is actually only 0.7 per cent.

The marginal decline in market prices paints a more positive picture of the US housing industry, as the economy continues its slow recovery. CoreLogic, producers of the Home Price Index (HPI), spoke to Property Wire:

“The slight month on month decline was predictable, particularly given the renewed concerns over a double dip recession, high negative equity, and the persistent levels of shadow inventory,’ said chief economist Mark Fleming, adding: “The continued bright spot is the non distressed segment of the market, which is only marginally lower than a year ago and continues to exhibit relative strength.”

Comparing the HPI of August 2011 to April 2006, Property Wire notes that values have dropped by 30.5 per cent. However, excluding distressed property sales, the difference is a smaller 21 per cent. As August’s report shows fewer areas experiencing year on year declines, the progress of America’s housing market continues to be supported – and masked by – distressed homes.

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    Nick Marr

    I am an internet entrepreneur with a passion for driving big audiences and a love for real estate. I have had plenty of ups and downs which has given me the experience to help others launch their own businesses. I enjoy projects that save consumers time and money, challenge convention and add real value to peoples lives.