While some individual markets have experienced a bottoming out and increase in prices, 29 of the 143 markets tracked by real estate sales and data services provider Zillow, are now showing signs of a possible double dip in home values.
In those markets, property prices have flattened or have begun to decrease again after showing at least five consecutive monthly increases during 2009, the latest Zillow Home Value Index shows.
It puts the national median price at $186,200 in the fourth quarter of 2009, a 5% decrease from the same time in 2008.
Compared to the third quarter, prices declined 0.5% during the last quarter of 2009.
The index is a measure of median home values of all single-family residences, condominiums and cooperatives, both on the market and not for sale. The final quarter of 2009 marked the 12th consecutive quarter of year-over-year declines, Zillow said.
‘The good news is that for those markets that will see a double dip in home values before reaching a definitive bottom, this second dip will not be a return to the magnitude of depreciation seen earlier, but rather will look more like a modest aftershock of the earlier downturn,’ said Zillow chief economist Stan Humphries.
Some of the largest markets at risk of a double-dip include Boston, Atlanta and San Diego, Zillow said.
However, values in 29 other markets, including Los Angeles and New York increased month-over-month until the fourth quarter of 2009 and Zillow warned that in December the increases slowed.
It added that many markets could experience several months of sustained decline in early 2010.
The index also shows that property values increased year-over-year in 27 of 143 markets and remained flat in 15.
‘While we have seen strong stabilization in home values during 2009, there are clear signs that they will turn more negative in the near term.
What we saw in the middle of 2009 was a brief respite from a larger market correction that has not yet run its course,’ explained Humphries.
The rate of borrowers with negative equity, where the value of their property was greater than the remaining balance on their mortgage, was 21.4% in the fourth quarter of 2009, up slightly from 21% in the third quarter.
But foreclosures continue to mount, as the number of homeowners that lost their home reached one out of every 1,000 properties, a new high in Foreclosure resales accounted for 20.3% of all US home sales in December, lead by Mercedes, California where foreclosure resales took a 68.3% share of the market, followed by Las Vegas, 64%, and Modesto, California at 62%.
