In the latest report pointing to a housing recovery, Zillow says a 0.5 percent month-to-month rise in it’s Home Value Index (ZHVI) marks the largest monthly increase since May 2006 – before home values hit the roof.
Home values decreased 0.5 percent from the fourth quarter of 2011 to the first quarter of 2012 and was down 3.1 percent on an annual basis.
Zillow offered good news on a more local front predicting home values in Phoenix should rise 6.5 percent over the next 12 months. In Miami, home values are expected to climb 5.6 percent.
“For people who have been waiting to time their home purchases close to the market bottom, it’s time to start shopping,” said Dr. Stan Humphries, Zillow chief economist.
“While we don’t expect to see national home values continue to climb at a rate of 0.5 percent per month, it’s safe to assume they won’t fall much further in most markets. The Zillow Home Value Forecast predicts a national bottom in home values in the fourth quarter of this year,” according to statements in Humphries’ blog.
Zillow said markets already experiencing bottom conditions include Boston, Dallas, Denver, Miami, Orlando, Philadelphia, Phoenix, Pittsburgh, St. Louis and Tampa.
By year’s end, Baltimore, Los Angeles, and San Jose should join them. San Jose, CA came in with the highest ZHVI home value, $545,000. The lowest was Detroit, at $73,000.
Oklahoma City, OK had the greatest year-over-year home value increase, up 6.3 percent followed by Tulsa, 4.1 percent; Binghamton, NY, 4 percent; Ft Myers, FL, 3.9 percent and Grand Rapids, MI, 3.1 percent. At the bottom were Mobile, AL where values were down 11.1 percent; Chicago, down 9.7 percent; Lansing, MI, down 8.8 percent; Atlanta, GA down 8.7 percent and Tucson, AZ, down 8.6 percent.
Recovery uncertainty remains in Las Vegas, New York, Portland, Riverside, and San Diego.
Areas revealing both quarterly and annual home value appreciation included Pittsburgh, Denver, Honolulu, Phoenix, and Miami-Fort Lauderdale, the latter two among the hardest hit areas in the nation during the downturn.
The index put the national home value at $146,200, still well off the peak of $193,800 recorded back in May of 2007. Home prices are back to late 2003 levels and are down 24.6 percent since the peak.
ZHVI covers 165 metropolitan areas of which 70 showed quarterly home value appreciation. Five metros remained flat, while 90 metros show home values losses. A sign of the times that a recovery is on the horizon exists in the 18 markets.
Rising rents are making home buying more attractive. The Zillow Rent Index (ZRI) shows year-over-year gains for over 70 percent of the metropolitan areas covered by the ZRI. Year-over-year rents were up 16.1 percent in Canton, OH; 15.6 percent in Philadelphia; 14.9 percent in Destin, FL; 14.4 percent in Vero Beach, FL and 14 percent in Des Moines, IA.
Foreclosure sales continue to depress home prices. In March foreclosures comprised 20.5 percent of all sales, a new ZHVI high.
“We expect foreclosure re-sales to continue their steady increase that we’ve seen over the last several months. While the heavy volume of foreclosures will put downward pressure on prices, this is an inevitable step on the road of housing market recovery,” the report offered.