According to new data release by Zillow in Early May 2011, home prices have fallen 8% from what they were a year ago and now declining at a rate of around 1% every month. Zillow expects this trend to continue into 2012, and expect we will see another 8% decline by the end of this year. This means if you purchase your home this time last year, you can expect be upside down by 16% by January of next year.
The numbers that Zillow released are based on a nationwide average, so the rate of depreciation may be greater depending on your market.
In addition, Zillow also says that there are currently 16.3 million homeowner’s that are upside down on their homes, which makes up 28% of homeowner’s in the. With another 8% decline in value expected, this rate is only sure to increase.
Although this news may be cause for many would be buyer’s to wait out the market even longer, it may not be the case for the savvy investor. With interest rates still well below 5%, investors are picking up rental in today’s market are seeing annual net returns (Cap Rate) of 7% or more. Even with another 8% drop in prices, many investors are still choosing to buy rather than risk the chance of being stuck with a higher interest rate.
Should you have any questions or need further information,
please don't hesitate to contact me, (775) 220-1630
Or visit my website: www.SellingHomesinReno.com
NAR designated: Short Sale & Foreclosure Resource
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521