Housing prices appear to have bottomed, posting their first year-over-year increase since 2007 and fueling more talk of a real estate recovery – at least according to real estate site Zillow.
The site’s second-quarter report shows nationwide home values inching up 0.2% from the same quarter in 2011 to a median of $149,300. On a monthly basis, prices have been rising for four straight months.
Nearly a third of individual metro areas saw prices rise; in Phoenix alone, homes were worth 12.1% more compared to a year ago, according to Zillow.
“The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own,” Zillow Chief Economist Stan Humphries said in a statement.
But don’t expect many huge price spikes. Over the next 12 months, Zillow expects home values to rise 1.1%, with increases forecast for nearly half of the nation’s markets.
“We expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity,” Humphries said. Inflation and the looming threat of a so-called fiscal cliff of spending cuts and tax increases will likely be another dampening factor.
Foreclosures have declined since January to constitute 5.8 of every 10,000 homes, according to Zillow. Since February, foreclosure resales have shrunk and made up 15.6% of all home sales in June. DataQuick said yesterday that the number of California homes entering foreclosure was at 2007 levels.
But in the wake of a national foreclosure settlement announced earlier this year, foreclosures are set to rise, sending more properties streaming back into the market by the end of the year, Humphries said.
“Acute inventory shortages,” however, will cause high home-buyer demand to absorb the extra properties for sale, he said.