Home values declined 4.7% in 2011, ending at $146,900, according to new data from the Zillow Home Value Index. The fourth quarter of 2011 also ended with a thud, with home values falling 1.1%.
Zillow also predicts that home values will continue falling this year, ending at a 3.7% drop. Zillow does not forecast a definitive national bottom until 2013.
Zillow predicts that the economically troubled housing markets of 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.
Other markets that are likely to reach a bottom and see home values increase or remain flat in 2012 are the Baltimore and Washington, D.C., metropolitan areas. 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 Dallas; Denver; Miami-Fort Lauderdale, Fla.; New York; Pittsburgh; San Diego; San Francisco; and Tampa, Fla.
‘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,’ says Zillow Chief Economist 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.’