Zillow Chief Economist Estimates Home Prices Will Hit the Bottom in 2012

Zillow Chief Economist Estimates Home Prices Will Hit the Bottom in 2012

Third Quarter Home Values Report

For the third quarter, there is a mixture of good news and bad news. The level of single family homeowners underwater in the third quarter is up to 28.6 percent from 26.8 percent in the past quarter while home values continue to “tread water” as real estate media company Zillow phrased it, dropping only 0.2 percent in the quarter.

Quarterly declines were reported in 67 percent of metro areas tracked by zillow, with 26 of 157 markets posting an increase in values.

Over the last year, housing values have dropped 4.4 percent with 86 percent of markets showing value drops and only 11 markets improving in value. Zillow Chief Economist Dr. Stan Humphries says home prices will hit the bottom in 2012, pointing to unemployment and negative equity as the main plagues to housing.

25 Largest Metro Areas

“The peak summer home buying season is over for the year, with fewer home sales to show for it than one would expect based solely on the underlying fundamentals of price and financing costs. Home affordability is at historic lows courtesy of a large reset in home prices and continued low mortgage rates,” said Zillow Chief Economist Dr. Stan Humphries. “We’re clearly dealing with a crisis of confidence that is keeping potential buyers on the sidelines, fueled largely by high unemployment and more general economic uncertainty.” “That said, given the steady drumbeat of recent negative economic news, home values held up better than would be expected. We have been forecasting a housing bottom in 2012, at the earliest, and third quarter data further confirms this forecast.”

Tara Steele. (11.8.2011). Real Estate. In Industry News. Retrieved 11.8.2011, from agbeat.com.