According to the Zillow Home Value Forecast, prices are projected to fall 0.4 percent over the next year, but not all markets are expected to see this decline, with several already appearing to have reached bottom.
Of the 30 metro areas covered by the Zillow forecast, 19 are expected to, or already have hit their lowest point in 2012, with nowhere else to go but up.
Markets that seem to have bottomed out already are Boston, Dallas, Denver, Miami, Orlando, Philadelphia, Phoenix, Pittsburgh, St. Louis, and Tampa. Zillow expects Baltimore, Los Angeles, and San Jose to follow suit.
Metro areas that are expected to see significant gains following their low point in the next 12 months include Phoenix (6.5 percent), Miami-Ft. Lauderdale (5.6 percent), and Tampa (2.5 percent), according to the forecast.
“When the bottom will hit will vary by market, and it’s nearly impossible to time a purchase exactly right,” said Zillow Chief Economist Dr. Stan Humphries. But home prices are not the only part of the equation. Buyers also should take into account the possibility that rising mortgage rates could offset any further home value declines that may occur.”
Also, the Zillow Real Estate Market Reports, which covers 165 metropolitan areas, showedhome values appreciated on a quarterly basis in 70 of the areas covered, while 90 metros posted losses, and 5 had no change.
Overall, the real estate report showed home values declined 0.5 percent to $146,200 for the 2012 first quarter compared to the fourth quarter of 2011. When looking at home values a year ago in March 2011, values are down 3.1 percent.
Even with the drop on a quarterly and annual basis, home values rose month-over-month in March by 0.5 percent compared to February.
Areas that posted the largest month-over-month gains were Phoenix (1.4 percent) and Miami (1.4 percent).
In the report, Zilllow stated, “While we are encouraged by strong data in March, it is too early to call rising home values a trend as we still expect some modest declines in national home values this year with a definitive national bottom later this year or early 2013.”
The Zillow Rent Index showed year-over-year gains for over 70 percent of the metropolitan areas covered by the rent index compared to 14 percent of metro areas covered by the ZHVI experiencing annual value increases.
The rate of homes foreclosed dropped to 2009 levels, with 7.4 out of every 10,000 homes foreclosed in March, down from the month before in February when 8.3 out of every 10,000 homes foreclosed. Foreclosure re-sales were a major part of sales in March, making up 20.5 percent of all sales.
“March’s lower foreclosure rate does not show signs of the expected increase after the multi-state attorneys general settlement in February,” Humphries said. “But we should take this news with a grain of salt, as there still exists the possibility for foreclosures to increase again.”