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Fewer foreclosed REO homes are changing hands, allowing home price indices to shed some of the weight that comes with deeply discounted property sales. But it hasn't been enough to change forecasts that home prices have further to fall still, according to ""Zillow"":http://www.zillow.com.
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The Seattle-based company says foreclosure re-sales dropped to just 20 percent of total sales in June. For the second-quarter period ending that same month, Zillow recorded its smallest quarterly decline in national home prices in over four years â€" a drop of just 0.4 percent.
Ninety-four of the 154 metropolitan statistical areas (MSAs) covered in Zillow's study experienced home price appreciation with their value indices rising from the first to the second quarter.
The seasonal gains helped to improve the negative equity picture. Zillow says 26.8 percent of single-family homeowners with mortgages owed more on the loan than their home was worth in the second quarter. That's down from the first quarter when 28.4 percent of mortgage borrowers were underwater.
[COLUMN_BREAK]Looking at the home price data from a broader, year-over-year barometer, the second-quarter results don't stack up so well. Zillow says home values fell on an annual basis in 142 of the 154 MSAs in its survey. The company's national index dropped 6.2 percent compared to the second quarter of last year.
By Zillow's measurements, home values are now down 28.8 percent from their peak in June 2006, and the company says it expects to see more declines before all is said and done.
""While there are many positive signs in the second quarter, and it is clear the post-tax credit free-fall of home values is over, we're not out of the woods yet,"" said Dr. Stan Humphries, Zillow's chief economist.
Humphries says the fact that two-thirds of the metros in Zillow's report saw price appreciation in Q2 is ""encouraging,"" but he tempered that by noting the gains are coming on the heels of one of the worst quarters since the housing recession began.
Humphries says he expects a bumpy road ahead with many ups and downs in home values before this is over.
""[W]e continue to expect a true bottom in 2012, at the earliest,"" he said, adding that there are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand.
Humphries’ predictions are very much in line with the housing ""forecast put out by Fiserv"":http://dsnews.comarticles/fiserv-predicts-price-declines-through-2011-followed-by-gains-2011-08-09 on Tuesday, projecting continuing home price declines through the remainder of this year with small gains beginning in 2012.
