Home Values Climb In July, But Increase Expected To Be Temporary
For the first time in five years, home values were on their way up in July, increasing 0.1% from June, according to Zillow’s July Real Estate Market Reports. It’s encouraging news that, after being battered by nearly 60 months of consecutive declines, home values peeked up into positive territory.
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But we shouldn’t get ahead of ourselves. The drumbeat of negative economic news that started in mid-summer has resonated with buyers, which means we probably won’t see continuous increases over the remainder of 2011, says Zillow Chief Economist Stan Humphries over on the Zillow Research page. In fact, existing-home sales and pending home sales both fell from June and July, and last Friday’s poor jobs report won’t help stimulate sales.
So, Zillow’s forecast stands. We expect home values to bottom in 2012, at the earliest, and then see very little appreciation for the next several years. Recovery won’t come until after that, and it will be a modest recovery, with appreciation rates hovering around 2-4% annually.
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