Home prices reach a bottom: Zillow
CHICAGO (MarketWatch)—National home values have hit bottom and are on the rise, the real-estate website Zillow reported in a news release on Tuesday.
“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” Zillow Chief Economist Stan Humphries said in a news release. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.”
Values of U.S. homes rose 0.2% in the second quarter, compared with the same time period a year ago, marking the first annual increase in values since 2007, Zillow reported.
Phoenix had the largest home-value gain; values were up 12.1% there during the second quarter, compared with the same period last year. All told, values rose in 53 of the 167 markets covered in Zillow’s Real Estate Market Reports, which is aggregated from public sources.
Moreover, Zillow predicted a 1.1% increase in home values over the next year. Values are expected to rise in 67 of the 156 markets in Zillow’s Home Value Forecast, which uses data and market conditions to predict home values.
“Of course, there is still some risk as we look down the foreclosure pipeline and see foreclosure starts picking up. This will translate into more homes on the market by the end of the year, but we think demand will rise to absorb that, particularly in markets where there are acute inventory shortages now,” Humphries said. “Looking forward, we expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity.”
Zillow reported that 5.8 out of every 10,000 homes were lost to foreclosure in June, down from 7.9 of every 10,000 homes lost in January. But the number of foreclosures is expected to increase, based on a pickup in foreclosure starts since the completion of the National Foreclosure Settlement, the company said in the release.
Other measures have also indicated that prices are on the way up.
The S&P/Case-Shiller 20-city composite index rose 1.3% in the month of April, and 19 out of 20 cities saw home-price gains during the month. The Case-Shiller results for May are scheduled for release on July 31.
Read more: U.S. home prices jump 1.3% in April: Case-Shiller.
The National Association of Realtors reported that median home prices rose for the third month in a row in June, rising 7.9%, compared with a year ago. Read more: Sales of existing homes drop 5.4% in June.
Doug Spiers / Principal Broker
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