The economy has been generally improving for some time now as the effects of the recent recession continue to fade, but for a long time, the housing market seemed unaffected these upticks. However, that may now be changing for the better.
While on a quarter-over-quarter and annual basis, home values declined in the first three months of the year, that trend began reversing itself in March, according to the latest Real Estate Market Reports from the industry tracking firm Zillow. March saw home values increase 0.5 percent over February to an average of $146,200, but that figure was still down by the same 0.5 percent between the fourth quarter of 2011 and the first quarter of 2012. Further, values were down 3.1 percent from March 2011. And the news probably won’t be getting better; Zillow believes there could be more modest declines over the remainder of the year.
But at the same time, it’s important to note that in general home values have improved considerably over the past several months, the report said. Now, national home values are back to the levels seen in late 2003, and well above those observed at the depths of the recession.
Further, the rate of foreclosure observed nationwide decreased significantly in March, falling to just 7.4 out of every 10,000 homes nationwide, the report said. Experts had been predicting that foreclosure liquidations would increase significantly as a result of lenders settling charges brought by many states’ attorneys general in February. In addition, the share of foreclosure re-sales nationwide increased to 20.5 percent of all sales, a new all-time high, and it’s expected that this trend of increases will continue over the next several months at least.
This trend might be the reason for the decline in home values, as foreclosed properties tend to sell for far lower totals than non-distressed homes, the report said. However, this is seen as a very necessary part of the overall housing recovery, as it encourages more buyers to enter the market in general. Zillow also believes that many of the nation’s toughest housing markets have already bottomed out and are in states of recovery.
Foreclosures were a major problem during the recession, and millions of consumers lost their homes as a result of this epidemic. But now that the economy is improving, more homeowners are in a position to keep paying their bills on time and in full.
Image: erix!, via Flickr