Signs that US property market is reaching bottom, latest index suggests
Residential property values in the United States continued their decline in October, falling 0.3% from September, according to the latest Zillow Real Estate Market Report.
However, the rate of monthly depreciation has stabilised as the housing market heads towards the bottom. On a year on year basis, the Zillow Home Value Index declined 5.1% to $147,900 and home values have fallen 23.7% since their peak in May 2007.
Regionally, 95 of the 156 of the metropolitan statistical areas (MSAs) covered by Zillow experienced monthly home value depreciation and 39 metros showed monthly home value increases and 22 metros remained flat.
Zillow says that encouragingly, there were some positive signs in some of the harder hit areas. In Miami, home values were flat on a monthly basis while Phoenix and Detroit both saw monthly gains of 0.2% and 1%, respectively.
Only ten metros saw home value appreciation on a yearly basis with seven of those metros also having monthly appreciation, including Fort Collins, Colorado, Madison, Wisconsin, and Oklahoma City.
The foreclosure liquidation rate continued to decline in October with 8.1 out of every 10,000 homes in the country being liquidated. This is down significantly from the all time high of 10.7 out of every 10,000 in October 2010.
‘As expected, home values continue to fall in the back half of this year due to an abundance of housing supply relative to demand. Potential buyers remain on the sidelines or doubled up in other households, despite record high housing affordability and historically low mortgage rates,’ said Dr. Stan Humphries, Zillow chief economist.
‘This crisis of consumer confidence along with high rates of negative equity, are the biggest factors hindering a housing recovery. However, I’m encouraged by the positive, albeit slow, progress in working down the unemployment rate, which should help to improve consumers’ appetites for buying homes,’ he added.
This month Zillow has substantially increased the coverage of its Home Value Index (ZHVI) by adding 18 million homes to the index and increasing the number of counties covered from 750 to nearly 3,000.