Home Value Declines Pick Up in Fourth Quarter, But Zillow Forecasts Smaller Declines in 2012

Some of Nation's Hardest-Hit Markets Likely to Reach Bottom This Year, According to New Q4 2011 Zillow® Home Value Forecast

News provided by

Zillow, Inc.

Feb 09, 2012, 08:00 ET

SEATTLE, Feb. 9, 2012 /PRNewswire/ -- Home value declines in the United States accelerated in the fourth quarter, with the Zillow Home Value Index (ZHVI)(1) falling 1.1 percent during the quarter after posting less significant declines in the previous two quarters, according to Zillow's fourth quarter Real Estate Market Reports(2). The ZHVI declined 4.7 percent in 2011, ending at $146,900.

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However, the newly released Zillow Home Value Forecast predicts home values will continue falling through December 2012, but with smaller declines in 2012 than 2011. 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 Forecast calls for a national decline of 3.7 percent in 2012.

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 tracked by Zillow.

Metropolitan statistical areas (MSAs) like Los Angeles, Riverside, Calif. and Phoenix, which were among the hardest-hit in the housing downturn, will likely reach a bottom in home values 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 the Baltimore and Washington DC MSAs. 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 the Dallas, Denver, Miami-Fort Lauderdale, Fla., New York, Pittsburgh, San Diego, San Francisco and Tampa, Fla. MSAs.

"While it may be disconcerting for homeowners 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 Dr. 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. 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."

Foreclosures

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 percent of all sales in December. Foreclosure re-sales have steadily risen since August, when 17.1 percent of all sales were foreclosure re-sales.

	Zillow Home Value Index
Largest 25 Metropolitan Statistical Areas Covered by Zillow	Q4 2011	QoQ Change	YoY Change	Change From Peak	Forecasted Change in ZHVI, Dec. 2011- Dec. 2012
United States	$146,900	-1.1%	-4.7%	-24.2%	-3.7%
New York	$336,500	-2.4%	-5.3%	-25.6%	-1.7%
Los Angeles	$383,100	-0.5%	-6.7%	-37.8%	1.2%
Chicago	$158,800	-3.6%	-10.9%	-36.2%	-7.6%
Dallas-Ft. Worth, Texas	$120,500	-1.3%	-3.8%	-16.0%	-0.8%
Philadelphia	$185,300	-2.2%	-5.6%	-19.4%	-1.9%
Miami-Fort Lauderdale, Fla.	$137,500	0.4%	-3.0 %	-55.2%	0.0%
Washington	$302,500	0.1%	-1.1%	-29.3%	1.3%
Atlanta	$109,100	-2.0%	-12.9%	-37.9%	-8.5%
Detroit	$72,900	1.0%	-5.7%	-52.9%	-4.1%
Boston	$302,900	-1.6%	-3.3%	-20.1%	-2.0%
San Francisco	$464,000	-0.3%	-5.8%	-33.8%	-0.3%
Phoenix	$123,500	2.2%	-5.0%	-55.8%	0.6%
Riverside, Calif.	$178,700	0.0%	-5.5%	-55.6%	0.3%
Seattle	$250,900	-0.9%	-8.5%	-33.5%	-6.9%
Minneapolis-St. Paul, Minn.	$163,000	-1.4%	-8.4%	-31.9%	-4.9%
San Diego	$337,300	-0.4%	-5.2%	-36.9%	-0.5%
St. Louis	$119,800	-3.5%	-7.9%	-22.8%	-5.4%
Tampa, Fla.	$103,400	-0.9%	-9.1%	-52.8%	-4.6%
Baltimore	$214,100	-1.0%	-2.5%	-24.4%	0.1%
Denver	$203,400	-0.6%	-2.5%	-11.8%	-1.0%
Pittsburgh	$105,400	-1.1%	0.1%	-2.0%	-0.2%
Portland, Ore.	$206,500	-1.1%	-6.8%	-26.9%	-4.1%
Cleveland	$107,400	-2.8%	-6.0%	-24.3%	-5.5%
Sacramento, Calif.	$202,100	-0.3%	-9.1%	-52.0%	-5.5%
Orlando, Fla.	$113,400	-0.1%	-7.0%	-56.1%	-4.1%

The full national report, in its interactive format, will be available at www.zillow.com/local-info on Thursday, Feb. 9. Additionally, in most areas data is available at the state, metro, county, city, ZIP code and neighborhood level.

Further analysis from Dr. Stan Humphries can be found on Zillow Real Estate Research, at http://www.zillow.com/research.

About Zillow, Inc.

Zillow (NASDAQ: Z) is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 150 markets at Zillow Real Estate Research. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile, Postlets® and Diverse Solutions™. The company is headquartered in Seattle.

Zillow.com, Zillow, Zestimate and Postlets are registered trademarks of Zillow, Inc. Diverse Solutions is a trademark of Zillow, Inc.

(1) The Zillow Home Value Index is the median Zestimate® valuation for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. The Home Value Index at the national level includes data from over 80 million homes in almost 3,000 counties and 440 metropolitan statistical areas. It is expressed in dollars and is for a particular geographic region.

(2) The data in Zillow's Real Estate Market Reports is aggregated from public sources by a number of data providers for 164 metropolitan statistical areas dating back to 1996. Mortgage and home loan data is typically recorded in each county and publicly available through a county recorder's office.

SOURCE Zillow, Inc.