Zillow Real Estate Research joined CoreLogic and Lenders Processing Services by releasing its December Home Value Index (HVI). According to the data collected from 132 metropolitan areas, monthly depreciation in home values increased 0.9 percent in December 2010 from the previous month. The median home value nationally was $175,215, down 27 percent from the housing bubble peak in June 2006.
Of all the metropolitan regions tracked in the fourth quarter Real Estate Market Report, 123 metropolitan areas experienced monthly declines in home values (93%), only 8 metropolitan areas saw monthly increases (6%), and one area was flat from the prior month. On a year-over-year basis, 115 metros were down, 9 regions were flat, and 8 regions were up.
The report also disclosed that the number of underwater homes, where the mortgage balance is greater than the current value of the home, jumped to 27% in the fourth quarter, up from 23.2 percent in the third quarter.
The increase in negative equity was attributed to a substantial slowdown in foreclosure liquidations accompanied with the increase in depreciating home values.
Foreclosure liquidations dropped to 9.1 out of every 10,000 homes in December down from the peak in October which experienced a rate of 12 out of every 10,000 homes being liquidated.
The report attributes the slowdown in liquidations to the delays and lengthened process times resulting from the numerous “robo-signing” controversies.
“While it’s never good to see monthly depreciation rates this high, we have been saying that the 54-month long housing recession would strongly reassert itself in the post tax credit period. And it has. I suspect that this is near the peak monthly depreciation rates that we’ll see and I expect depreciation to start to improve in early 2011,” Stan Humphries from Zillow said.
The report also went on to say that Zillow expects January to remain about the same as December with depreciation rates decreasing in the months to follow through at least the first half of the year with depreciation stabilizing the second half of the year.
Unfortunately, Zillow also predicts that they expect home values to bounce around the bottom and not see appreciation rates that will outpace inflation for at three years after home prices bottom out.
Tags: zillow, home value index, home prices, housing bubble, home values, underwater homes, negative equity, depreciating home values, robo-signing
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