Residential property prices the US decreased again in the fourth quarter of 2011 and few areas are likely to see increases in 2012, according to the latest data from Zillow.
It's latest Home Value Index fell 1.1% but there were less significant declines in the previous two quarters and overall the drop in 2011 was 4.7%.
Zillow predicts that home values will continue falling in 2012, but with smaller declines than 2011, probably ending the year 3.7% down. While home values in some individual markets are likely to reach a bottom this year, Zillow does not forecast a definitive national bottom until 2013.
The Zillow Home Value Forecast uses data from past home value trends and current market conditions, including leading indicators like home sales, months of housing inventory supply and unemployment, to predict home values over the next 12 months for the nation and the 25 largest markets.
Metropolitan statistical areas (MSAs) like Los Angeles, Riverside, California, and Phoenix, which were among the hardest hit in the housing downturn, will likely reach bottom soon and will experience home value increases or stability in 2012, according to the forecast.
Other markets that are likely to reach a bottom and see home values increase or remain flat in 2012 are Baltimore and Washington DC. Markets which may end 2012 without significant increases in home values, but which are likely candidates to see a bottom late in the year are Dallas, Denver, Miami-Fort Lauderdale, New York, Pittsburgh, San Diego, San Francisco and Tampa.
‘While it may be disconcerting for home owners to see values nationally fell at a fairly rapid clip at the end of last year, that trend won't last through 2012,’ said Zillow chief economist Stan Humphries.
‘The fourth quarter's weak performance proves that pronouncements of a bottom in home values have been premature, but the good news is that 2012 will prove to be a better year than 2011. In fact, many markets show signs of a bottom this year, although a bottom may continue to elude the nation as a whole in 2012,’ he explained.
‘Fortunately, against a backdrop of modest further declines in home values, we expect that home sales will pick up briskly this year as affordable prices bring more buyers to the table, especially investors and second home buyers,’ he added.
In the fourth quarter, the rate of homes foreclosed edged upward from eight out of every 10,000 homes in November to 8.2 out of every 10,000 in December. However, the rate was lower than at the end of the third quarter, when 8.6 out of every 10,000 homes were lost to foreclosure.
Additionally, foreclosure re-sales made up 19.1% of all sales in December. Foreclosure re-sales have steadily risen since August, when 17.1% of all sales were foreclosure re-sales.
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