Although home values are 6.2% lower than last year, the drop in value between the first and second quarters was the smallest quarterly decline in four years, says Zillow’s second quarter Real Estate Market report.
Home values fell only 0.4% in the second quarter 2011, but on a regional yearly basis there was a decline in property value in 142 of the 154 metropolitan statistical areas (MSAs) covered by Zillow. However, on a quarter-to-quarter basis, 61% of MSAs saw an appreciation in home value, and the Zillow Home Value Index rose between the first and second quarters.
Another positive trend is a quarterly decrease in negative equity, which fell slightly to 26.8% down from 28.4%. The rate of foreclosure resales also fell from first quarter levels, as 19.7% of June sales were foreclosure resales, compared to 21.4% in March.
Despite these slight improvements, Zillow says home values won’t truly bottom out until 2012, at the earliest, with foreclosures, negative equity, and fluctuating home demand factoring in.
“While there are many positive signs in the second quarter, and it is clear the post-tax credit free-fall of home values is over, we’re not out of the woods yet,” said Zillow Chief Economist Dr. Stan Humphries. “It is very encouraging that two-thirds of markets in our report experienced home value appreciation, but we have to remember that this is coming on the heels of one of the worst quarters since the housing recession began.
He says there’s still a “bumpy road ahead,” with more ups and downs in home values, and this instability can be seen as only 25 out of 154 MSAs showed two consecutive quarters of appreciation, including Pittsburgh, Pa. and Washington, D.C.
MSAs with positive appreciation trends in the last quarter include Pittsburgh, with a 2.8% increase in home value, Detroit and Boston, both with a 2.1% rise, and Washington, D.C., where home values went up 1.7%.
Overall, many of these MSAs are still experiencing much lower home values on a year-over-year basis, and home values in some places, like Phoenix and Ft. Lauderdale, Fla. are more than 50% lower than they were at their peak, much worse than the national average of 28.8%.
Written by Alyssa Gerace