Home Value Declines Surpass Those of Great Depression
Along with the snow and cold, November brought continued declines in home values. In fact, the Zillow Home Value Index has now fallen 26% since its peak in June 2006. That’s more than the 25.9% decline in the Depression-era years between 1928 and 1933.
November marked the 53rd consecutive month of home value declines, with the Zillow Home Value Index (ZHVI) falling 0.8% from October to November, and falling 5.1% year-over-year.
Foreclosures, however, took a tumble in November, with fewer than one out of every 1,000 homes being foreclosed. Unfortunately, that is an effect of the bank moratoriums that took place after the robo-signing issues came to light. Foreclosures are expected to rise again once that effect wears off.
Despite the bad news in the housing market, things are looking up for the greater economy, with signs that it is doing better than it was just three months ago. On the Zillow Research page, Chief Economist Stan Humphries said this will help the housing market by increasing household formation and consumer confidence. These changes will be longer-term and gradual. In the near term, home values will continue to fall thanks to excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated unemployment.