National home values experienced their largest monthly gain since May 2006 by increasing 0.5% in March, according to Zillow’s Home Value Index.
Out of 30 metropolitan areas covered by the Zillow Home Value Forecast, 19 will reach bottom sometime in 2012 or already have reached its low pricing point.
Markets that Zillow expects to see significant home value increases over the next year include Phoenix with a 6.5% jump, Miami-Fort Lauderdale with a 5.6% climb and Tampa, Fla. with a 2.5% increase.
“For people who have been waiting to time their home purchase close to market bottom, it’s time to start shopping,” said Stan Humphries, chief economist at Seattle, Wash.-based Zillow. “When the bottom will hit will vary by market, and it’s nearly impossible to time a purchase exactly right. But home prices are not the only part of the equation. Buyers also should take into account the possibility that rising mortgage rates could offset any further home value declines that may occur.”
But there is not good news all across the country. Zillow projects 12 markets will experience home price declines over the next year, led by Atlanta with a 4.1% drop and Chicago with a 3.8% fall.
Nationally, the ZHVF shows that home values will fall 0.4% over the next 12 months, with many months showing no change or slight appreciation late this year, suggesting that home prices could reach a bottom in late 2012.
“From an economic perspective, the latter part of the first quarter is full of positive news as the spring selling season gets underway,” Humphries added. “While it is unlikely that national home values continue to rise at this rate through the rest of the spring and summer, it is undeniable that we are seeing sparks of life in the housing market.”
A key reason why prices are starting to stabilize is that foreclosures declined during the first quarter. In March, Zillow found that 7.4 out of every 10,000 homes were foreclosed, compared to 8.3 out of every 10,000 homes had some sort of foreclosure in February. Zillow said this marks the lowest foreclosure rate since 2009.
But 20.5% of all sales in March were foreclosure re-sales, a new high.
“March’s lower foreclosure rate does not show signs of the expected increase after the multi-state attorneys general settlement in February,” Humphries said. “But we should take this news with a grain of salt, as there still exists the possibility for foreclosures to increase again.”
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