Homes shed nearly a half trillion of value in 2009, yet residential real estate is staging a rebound compared to the previous year, with a third of markets now reporting price growth. The latest strides toward stabilization will be tested in the time ahead by the combined threats of unemployment, foreclosures and potentially rising mortgage rates. See the following article from Property Wire for more on this.
Almost $500 billion has been wiped off the value of residential properties in 2009 but that is less than the previous year and research shows that nearly one in three markets have seen prices rise this year.
The latest Zillow Real Estate Markets Report shows that losses slowed significantly this year to £489 billion, down from £3.6 trillion in 2008 when the real estate bubble burst.
But now that prices are stabilizing many areas are seeing values rising again.
The Boston metro area is performing best with $23 billion in gains and 48 of the 154 property markets tracked by Zillow showed gains this year. The Providence, Rhode Island, area was second, with a rise of $12.4 billion.
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But some 21% of single-family home owners owe more on their mortgages than their properties are worth, down slightly from 23%. Rising mortgage rates and foreclosures will serve to hold back the real-estate recovery, Zillow says.
‘Most housing markets across the country had a good summer, spurred largely by the government’s tax credits for homebuyers combined with very low mortgage rates.
Unfortunately, we believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high,’ said Stan Humphries, Zillow’s chief economist. ‘Both these factors will challenge the recent stabilization of home prices,’ he added.
Los Angeles saw the worst fall in values plummeted $60.8 billion. In Chicago, values fell $49.6 billion, New York prices slumped $49 billion and Miami-Fort Lauderdale saw values dropping $46 billion.
Whereas in Denver, home values shot up $10.7 billion after dropping $20 billion in 2008, and Atlanta prices rose $7.6 billion, compared with a $50 billion decline last year.
Meanwhile property prices continued to decline in October, falling 0.5% across the country, according to the latest data compiled by default management and residential collateral valuation service provider Integrates Asset Services.
IAS president and CEO Dave McCarthy said prices look likely to continue their fall if unemployment rises as more financially-stretched borrowers are more likely to default and foreclose.
‘There is potential for another wave of inventory next year, both from private sellers and banks.
The risk of renewed home price declines remains significant,’ he explained.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.