Home Values Stabilize, But No Bottom Until 2012: Zillow

U.S. home values declined slightly in October as the depreciation rate stabilized, but the market bottom likely will not hit until sometime next year after a drop of another 2 percent to 4 percent, according to the real estate research site Zillow.
Home values fell 0.3 percent in October compared to the previous month,  according to Zillow’s latest market report.
On a year-over-year basis, the Zillow Home Value Index declined 5.1 percent to $147,900. Home values have fallen 23.7 percent since their peak in May 2007.
Throughout the nation, 95 of the 156 metropolitan areas covered by Zillow saw monthly home value depreciation and 39 areas showed monthly home value increases. Twenty-two areas remained flat.
“As expected, home values continue to fall in the back half of this year due to an abundance of housing supply relative to demand,” said Dr. Stan Humphries, Zillow chief economist. “Potential buyers remain on the sidelines or doubled up in other households, despite record high housing affordability and historically low mortgage rates.”
There are some somewhat positive signs in hardest hit areas. In Miami, home values were flat on a monthly basis, while Phoenix and Detroit both saw monthly gains of 0.2 percent and 1.0 percent, respectively.
Only ten metro areas saw home value appreciation on a yearly basis, with seven of those cities also having monthly appreciation, including Fort Collins, Colo., Madison, Wis. and Oklahoma City.
The foreclosure liquidation rate continued to decline in October, with 8.1 out of every 10,000 homes in the country liquidated. This is down significantly from the record high of 10.7 out of every 10,000 in October 2010 – just preceding the “robo-signing” controversy and investigation into shoddy foreclosure paperwork by the biggest lenders.

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