Home Prices Unlikely to Hit Bottom Before 2012

Home prices showed the sharpest decline since 2008 in the first quarter, with negative equity at 28.4%, says the most recent data from online real estate hub Zillow.

U.S. home prices fell 3% in the first quarter, posting the greatest quarter-over-quarter decline since the fourth quarter of 2008, according to Zillow Real Estate Market Reports. From their peak in June 2006, home prices have fallen 29.5%. The bottom of the home market is unlikely to appear in 2011, says Zillow, based on the recent data.

Additionally, the data finds a negative equity level at 28.4%, up from 27% in the fourth quarter of 2010. The increase is attributed to accelerating home value declines.

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“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Dr. Stan Humphries. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

Foreclosures rose during the first quarter as banks unfroze moratoriums and allowed foreclosures to resume, Zillow said. Foreclosures had previously fallen in late 2010 due to a surge of moratoriums. In March, one out of every 1,000 homes in the country was lost to foreclosure.

Regionally, very few markets saw stable or rising home prices and 97% of the 132 markets Zillow covers saw prices fall. Only the Fort Myers, Fla., Champaign-Urbana, Ill. and Honolulu, Hawaii metropolitan statistical areas saw quarter-over-quarter increases, while the Sarasota, Fla. region remained flat.

Find out more about the Zillow Home Value Index.

Written by Elizabeth Ecker

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  • When interviewing developers in Arizona, it is very apparent they are already planning just to survive until 2013. Some may feel this kind of information is overly pessimistic and will do more harm than good. Yet these are the realities we are dealing with. For those who want to survive, it is important that we work with what we have — not what we do not have.

    On the subject of pessimism, it seems some Pollyanna industry execs are demanding that the reverse mortgage news services they support find positive news to report. That sounds defeatist and even fatalistic. It reminds one of the first major movie on the Titanic where the orchestra is ordered to play music while the ship sinks. Or as one of my friends used to say – “polishing the brass on a sinking Titanic.”

    It is time to be realistic and work positively within the confines we find ourselves, not look for non-existent needles in haystacks. We are in tough times and most of us are working hard to find bright spots in them. There is no sense in trying to rally troops by falsely declaring that we will see over 100,000 endorsements during this fiscal year; long-term that is far more disheartening than saying we will see 75,000 and getting 80,000 for this calendar year. While some lenders have quit the marketplace, some like John Lunde correctly point out that will mean more loans for those of us who remain.

    I hope while the NRMLA conference is going on DC some industry leaders will not only be addressing HECMs in meeting with elected and appointed officials but also the housing industry as a whole. It is time that the Obama Administration wakeup and realize that without a housing recovery, unemployment will never be diminished until after the next recession. Without lower unemployment, both Social Security and Medicare revenues suffer. Providing some financial support for the housing market seems paramount but so far has fallen on less than receptive ears.

  • When interviewing developers in Arizona, it is very apparent they are already planning just to survive until 2013. Some may feel this kind of information is overly pessimistic and will do more harm than good. Yet these are the realities we are dealing with. For those who want to survive, it is important that we work with what we have — not what we do not have.

    On the subject of pessimism, it seems some Pollyanna industry execs are demanding that the reverse mortgage news services they support find positive news to report. That sounds defeatist and even fatalistic. It reminds one of the first major movie on the Titanic where the orchestra is ordered to play music while the ship sinks. Or as one of my friends used to say – “polishing the brass on a sinking Titanic.”

    It is time to be realistic and work positively within the confines we find ourselves, not look for non-existent needles in haystacks. We are in tough times and most of us are working hard to find bright spots in them. There is no sense in trying to rally troops by falsely declaring that we will see over 100,000 endorsements during this fiscal year; long-term that is far more disheartening than saying we will see 75,000 and getting 80,000 for this calendar year. While some lenders have quit the marketplace, some like John Lunde correctly point out that will mean more loans for those of us who remain.

    I hope while the NRMLA conference is going on DC some industry leaders will not only be addressing HECMs in meeting with elected and appointed officials but also the housing industry as a whole. It is time that the Obama Administration wakeup and realize that without a housing recovery, unemployment will never be diminished until after the next recession. Without lower unemployment, both Social Security and Medicare revenues suffer. Providing some financial support for the housing market seems paramount but so far has fallen on less than receptive ears.

  • When interviewing developers in Arizona, it is very apparent they are already planning just to survive until 2013. Some may feel this kind of information is overly pessimistic and will do more harm than good. Yet these are the realities we are dealing with. For those who want to survive, it is important that we work with what we have — not what we do not have.

    On the subject of pessimism, it seems some Pollyanna industry execs are demanding that the reverse mortgage news services they support find positive news to report. That sounds defeatist and even fatalistic. It reminds one of the first major movie on the Titanic where the orchestra is ordered to play music while the ship sinks. Or as one of my friends used to say – “polishing the brass on a sinking Titanic.”

    It is time to be realistic and work positively within the confines we find ourselves, not look for non-existent needles in haystacks. We are in tough times and most of us are working hard to find bright spots in them. There is no sense in trying to rally troops by falsely declaring that we will see over 100,000 endorsements during this fiscal year; long-term that is far more disheartening than saying we will see 75,000 and getting 80,000 for this calendar year. While some lenders have quit the marketplace, some like John Lunde correctly point out that will mean more loans for those of us who remain.

    I hope while the NRMLA conference is going on DC some industry leaders will not only be addressing HECMs in meeting with elected and appointed officials but also the housing industry as a whole. It is time that the Obama Administration wakeup and realize that without a housing recovery, unemployment will never be diminished until after the next recession. Without lower unemployment, both Social Security and Medicare revenues suffer. Providing some financial support for the housing market seems paramount but so far has fallen on less than receptive ears.

  • When interviewing developers in Arizona, it is very apparent they are already planning just to survive until 2013. Some may feel this kind of information is overly pessimistic and will do more harm than good. Yet these are the realities we are dealing with. For those who want to survive, it is important that we work with what we have — not what we do not have.

    On the subject of pessimism, it seems some Pollyanna industry execs are demanding that the reverse mortgage news services they support find positive news to report. That sounds defeatist and even fatalistic. It reminds one of the first major movie on the Titanic where the orchestra is ordered to play music while the ship sinks. Or as one of my friends used to say – “polishing the brass on a sinking Titanic.”

    It is time to be realistic and work positively within the confines we find ourselves, not look for non-existent needles in haystacks. We are in tough times and most of us are working hard to find bright spots in them. There is no sense in trying to rally troops by falsely declaring that we will see over 100,000 endorsements during this fiscal year; long-term that is far more disheartening than saying we will see 75,000 and getting 80,000 for this calendar year. While some lenders have quit the marketplace, some like John Lunde correctly point out that will mean more loans for those of us who remain.

    I hope while the NRMLA conference is going on DC some industry leaders will not only be addressing HECMs in meeting with elected and appointed officials but also the housing industry as a whole. It is time that the Obama Administration wakeup and realize that without a housing recovery, unemployment will never be diminished until after the next recession. Without lower unemployment, both Social Security and Medicare revenues suffer. Providing some financial support for the housing market seems paramount but so far has fallen on less than receptive ears.

  • When interviewing developers in Arizona, it is very apparent they are already planning just to survive until 2013. Some may feel this kind of information is overly pessimistic and will do more harm than good. Yet these are the realities we are dealing with. For those who want to survive, it is important that we work with what we have — not what we do not have.

    On the subject of pessimism, it seems some Pollyanna industry execs are demanding that the reverse mortgage news services they support find positive news to report. That sounds defeatist and even fatalistic. It reminds one of the first major movie on the Titanic where the orchestra is ordered to play music while the ship sinks. Or as one of my friends used to say – “polishing the brass on a sinking Titanic.”

    It is time to be realistic and work positively within the confines we find ourselves, not look for non-existent needles in haystacks. We are in tough times and most of us are working hard to find bright spots in them. There is no sense in trying to rally troops by falsely declaring that we will see over 100,000 endorsements during this fiscal year; long-term that is far more disheartening than saying we will see 75,000 and getting 80,000 for this calendar year. While some lenders have quit the marketplace, some like John Lunde correctly point out that will mean more loans for those of us who remain.

    I hope while the NRMLA conference is going on DC some industry leaders will not only be addressing HECMs in meeting with elected and appointed officials but also the housing industry as a whole. It is time that the Obama Administration wakeup and realize that without a housing recovery, unemployment will never be diminished until after the next recession. Without lower unemployment, both Social Security and Medicare revenues suffer. Providing some financial support for the housing market seems paramount but so far has fallen on less than receptive ears.

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