Home values up for the first time in five years
It has been five years since home values have increased nationally, according to the Zillow Home Value Index based on median home values, which rose 0.1 percent from June to July and while this slight increase is cause for celebration, home values are still down 28.3 percent from housing’s peak in June 2006 and Zillow says values have dropped to July 2003 levels. Home prices are reportedly five percent below July 2010.
In July, one out of every 1,000 homes were lost to foreclosure which is a slight decrease from the peak of foreclosure filings in October 2010 which Zillow reports that 1.14 out of every 1,000 homes were lost to foreclosure. Foreclosures have not slowed because of improving delinquencies, rather because of banks in various stages of litigation due to the robo-signature scandal (where foreclosures notices were sent without human review) which has frozen and slowed much of the foreclosure process. Additionally, after MERS’ authority was questioned by judges as to whether or not they ever legally had the right to transfer title, the company has officially bowed out of facilitating foreclosures which has the potential to radically change foreclosure processing.
Foreclosures and losses
Zillow also reports that the current foreclosure resale rate which is comprised mostly of REOs has dropped to only 19.1 percent of all sales after the peak in June of 19.3 percent. Further, nearly one in three homes for sale had at least one price reduction in July, according to Zillow, with the median amount of price cuts currently at 6.5 percent which is on the decline. In July, 33.6 percent of homes sold for less than their previous purchase price, up from 28.2 percent in July of the previous year.
Dr. Stan Humphries, Zillow’s Chief Economist said, “As noted last month, it’s encouraging that the first half of the year has seen continued improvement in home value trends in the absence of outside stimulus. Specifically, we’ve seen decreasing monthly depreciation rates and now the first appreciation in almost six years. But the drumbeat of negative economic news received by home buyers beginning in the mid-summer period has already substantially affected consumer confidence which, in turn, will affect homebuyer demand. Signs of this impact can already be seen in the declines in both existing home sales (down 3.5% between June and July) and pending home sales (down 1.3% between June and July). Friday’s dismal job report will do little to get buyers worried about the economy off the fence either.”
