California stabilization not enough
to offset first quarter drop
Home values in most markets across the United States continued to fall during the first quarter of 2010 according to a report issued this week by Zillow.com, an online real estate marketplace.
The latest Zillow Home Value Index has revealed that home prices fell nationally 3.8 percent when compared to last year or a 1 percent drop for the quarter. The national average price for a home now stands at $183,700 although prices vary considerably from market to market. For instance, home prices in Detroit average $87,300; in San Jose the average price of a home is $561,700.
Of the 135 markets tracked by Zillow, 106 have declined on a year over year basis. But Zillow is also seeing some signs of life, particularly in several California markets where prices seemed to have bottomed out.
For example, in Los Angeles home prices have increased by 3.3 percent in the past year and now average $415,300. Markets in Modesto, Madera and Riverside continue to decline, but increases in home values are being seen in Salina, San Diego, San Francisco, Sacramento and Ventura. California has seen some of the worst bloodletting since home prices peaked in early 2006.
Commenting about the stabilization seen in certain markets, Zillow Chief Economist Dr. Stan Humphries said, “It’s a very positive sign that several large markets have hit what appears to be a tentative bottom in home values. While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year.
Zillow also noted that home foreclosure resales remain strong and made up 22.2 percent of all home sales for the month. More than 60 percent of home sales in the California markets of Madera, Merced and Modesta involved foreclosed property. And, nearly one-third of homes sold in March 2010 sold for less than what the owner had paid for it.
Currently, nearly one-quarter (23.3 percent) of homeowners are underwater, owing more on their homes than what they are worth. That’s up from 21.4 percent in the fourth quarter of 2009.
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