After its improvement stalled in July, home value depreciation remained steady in August, according to the October Zillow Real Estate Market Report. Home values fell 0.3% between July and August (about the same as the change between June and July) and declined 3.8% from their year-ago levels (see Figure 1). This makes it certain that a bottom in national home values is later this year or early next year at the earliest.
The foreclosure rate, defined as the number of homes foreclosed in a month as a percentage of all homes, climbed again in August to 0.113%, up from 0.109% in July (see Figure 2). Foreclosure re-sales as a percentage of all sales in August also increased to 19% from July’s level of 17%. In short, the pace of final foreclosures picked up and these foreclosures became a larger portion of monthly transactions.
Out of 124 metropolitan markets tracked this month, 93 saw negative year-over-year change in home values in August (75%), 14 saw flat annual change (11%), and 17 saw positive annual change (14%). California markets dominated the list of metros with the highest annualized home value appreciation rates with Salinas, Merced, San Diego, Los Angeles, San Francisco and San Jose topping the list. Non-California markets on that list included Oklahoma City, Little Rock, and Stamford. The markets seeing the largest declines in home values on a year-over-year basis included Ocala, Bend, Miami-Fort Lauderdale, Phoenix, Orlando, and Detroit.
While the California markets demonstrated strong annualized performance in August, the ramping down of state-funded tax credits does appear to be affecting appreciation trends as evidenced by the fact that monthly appreciation rates are falling again. Nowhere is this trend seen better than in Los Angeles where monthly home value appreciation actually went negative in July for the first time since April 2009. In August, monthly depreciation there picked up even more from -0.05% in July to -0.1% in August (see Figure 3).
On the positive front, the battered Las Vegas market is actually back in positive territory in terms of monthly home value appreciation. The revised ZHVI data for May 2010 pushed monthly appreciation that month above zero for the first time since May 2006. It’s been a long, hard four years for Vegas. Unfortunately, monthly appreciation waned between July and August and it’s very likely that Vegas will see additional months of negative home value appreciation before it’s all over there, but flirting around the zero monthly appreciation mark is definitely a welcome respite for where the Vegas market has been for the past four years.
Rip tide photo courtesy of Flickr.