Rentals Continue to Outshine Purchase Market, Home Values Still Plagued By Foreclosures

Foreclosure re-sales challenge previous peak in February, According to February Zillow Real Estate Market Reports

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Apr 10, 2012, 05:00 ET

SEATTLE, April 10, 2012 /PRNewswire/ -- Median rents rose 2 percent from February 2011 to February 2012, but home values continued to fall, declining 4.5 percent during that period, according to the February Zillow® Real Estate Market Reports[i].

The Zillow Rent Index[ii] (ZRI) showed year-over-year gains for nearly 68 percent of metropolitan areas[iii] covered by the ZRI. By contrast, only 8 percent of metro areas covered by the Zillow Home Value Index [iv] saw home values rise.

The rental market remains strong, especially in areas that continue to experience consistent home value declines. Chicago metro rents, for example, increased 8.6 percent over the past year, in comparison to an 11 percent fall in home values over the same period. In the Philadelphia metro, rents are up 14.8 percent annually while home values have fallen 5.4 percent year-over-year.

Foreclosures continue to be a key driver in keeping home values down. Foreclosure re-sales made up 20.3 percent of all sales in February, slightly higher than their previous peak of 20.2 percent of all sales in March 2011. Foreclosure re-sales made up 19.1 percent of all sales in February 2011.

Foreclosure re-sales are strongly affected by seasonality, and January and February are typically months with high percentages of foreclosure re-sales.

"We have made it through the worst of the housing recession with a bottom on the horizon, but the deep backlog of foreclosures, elevated negative equity and high unemployment are all still obstacles on the road to recovery," said Zillow Senior Economist Svenja Gudell. "The rental market remains a bright spot in the housing market, where many markets, especially hard hit ones, are experiencing significant annual rent appreciation and drawing the attention of investors. Converting distressed and vacant properties into rental units will reduce the oversupply of homes and speed up the recovery process."

In the short term, national monthly rents declined slightly from January to February, falling 0.5 percent to $1,212. Home values fell 0.5 percent during the same period to $145,400.

Metropolitan Areas	Zillow Home Value Index		Zillow Rent Index
Metropolitan Areas	February 2012	YoY Change	February 2012	YoY Change
United States	$145,400	-4.5%	$1,212	2.0%
New York	$334,200	-5.2%	--	--
Los Angeles	$381,900	-6.1%	$2,224	4.3%
Chicago	$154,600	-11.0%	$1,455	8.6%
Dallas	$121,500	-2.2%	$1,259	0.8%
Philadelphia	$184,500	-5.4%	$1,470	14.8%
Washington	$302,000	-0.9%	$1,989	6.6%
Miami-Fort Lauderdale, Fla.	$139,300	-0.6%	$1,578	5.6%
Atlanta	$107,800	-10.8%	$1,112	1.1%
Boston	$302,800	-2.5%	$1,835	1.9%
San Francisco	$458,500	-5.2%	$2,385	6.0%
Detroit	$72,500	-3.7%	$984	6.6%
Riverside, Calif.	$177,700	-4.5%	$1,532	0.5%
Phoenix	$126,000	0.1%	$1,126	2.1%
Seattle	$247,900	-7.4%	$1,581	5.4%
Minneapolis-St. Paul, Minn.	$162,800	-6.9%	$1,371	9.8%
San Diego	$334,200	-5.2%	$2,091	4.6%
Tampa, Fla.	$104,200	-6.0%	$1,156	3.7%
St. Louis	$121,000	-5.8%	$1,086	6.9%
Baltimore	$212,000	-4.0%	$1,599	8.6%
Denver	$204,200	-1.1%	$1,417	3.8%
Pittsburgh	$106,700	-0.3%	$969	2.6%
Portland, Ore.	$206,000	-5.0%	$1,325	5.7%
Sacramento, Calif.	$200,600	-7.9%	$1,406	0.4%
Orlando, Fla.	$113,200	-4.9%	$1,185	3.8%
Cleveland	$106,800	-4.5%	$1,060	4.3%

The full national report, in its interactive format, will be available at www.zillow.com/local-info at 8 a.m. ET on Tuesday, April 10. Additionally, in most areas, data is available at the state, metro, county, city, ZIP code and neighborhood levels. More market analysis of the monthly data can be found at www.zillow.com/research and a PDF of the Real Estate Market Report can be found at www.zillow.com/blog/research/data/.

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.

[i] The data in Zillow's Real Estate Market Reports is aggregated from public sources by a number of data providers for 276 core-based 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.

[ii] The Zillow Rent Index is the median Rent Zestimate (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars.

[iii] Metropolitan areas refer to core-based statistical areas, as designated by the U.S. Census Bureau.

[iv] 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. It is expressed in dollars.

SOURCE Zillow, Inc.