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21-07-2014, 10:31 PM
US home values mired in 'lost decade': Zillow
DOW JONES NEWSWIRES JULY 21, 2014 11:45PM
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Home values won't match their pre-recession peak of 2007 until 2017, an indication that the US is still in the middle of its housing recovery, according to Zillow Inc.'s real estate market report.
"In dozens of markets, homeowners that bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their home, a lost decade in which they will have built up no home equity," Zillow chief economist Stan Humphries said in a news release, citing "stubbornly high" negative equity rates.
More than a third of Americans have a mortgage that lacks enough equity to "realistically list their home for sale and buy another," he added.
Overall, home values -- an average of $174,200 -- are 11 per cent lower than peak levels seven years ago, according to Zillow. The recovery is expected to take even longer in 50 of the nation's 100 biggest metropolitan markets, Zillow said.
In the Chicago area, for instance, values are 24 per cent lower than peak, and Zillow doesn't see them returning to those top levels until the first quarter of 2026. In the New York-Northern New Jersey area, the company said values are 16 per cent below peak, with a return to those levels expected in the second quarter of 2019.
The Los Angeles area, however, is expected to return to peak levels by the fourth quarter of next year.
U.S. home values grew 6.3 per cent in the second quarter compared with the year-ago period, the lowest annual appreciation pace so far this year, according to the Zillow Home Value Index. This is an indication that the market is returning to normal levels, where values grow by 3% a year, the company said.
Meanwhile, rents rose 2.5 per cent from the prior-year period, but declined 0.3 per cent from the first quarter, Zillow said.
DOW JONES NEWSWIRES JULY 21, 2014 11:45PM
Save for later
Home values won't match their pre-recession peak of 2007 until 2017, an indication that the US is still in the middle of its housing recovery, according to Zillow Inc.'s real estate market report.
"In dozens of markets, homeowners that bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their home, a lost decade in which they will have built up no home equity," Zillow chief economist Stan Humphries said in a news release, citing "stubbornly high" negative equity rates.
More than a third of Americans have a mortgage that lacks enough equity to "realistically list their home for sale and buy another," he added.
Overall, home values -- an average of $174,200 -- are 11 per cent lower than peak levels seven years ago, according to Zillow. The recovery is expected to take even longer in 50 of the nation's 100 biggest metropolitan markets, Zillow said.
In the Chicago area, for instance, values are 24 per cent lower than peak, and Zillow doesn't see them returning to those top levels until the first quarter of 2026. In the New York-Northern New Jersey area, the company said values are 16 per cent below peak, with a return to those levels expected in the second quarter of 2019.
The Los Angeles area, however, is expected to return to peak levels by the fourth quarter of next year.
U.S. home values grew 6.3 per cent in the second quarter compared with the year-ago period, the lowest annual appreciation pace so far this year, according to the Zillow Home Value Index. This is an indication that the market is returning to normal levels, where values grow by 3% a year, the company said.
Meanwhile, rents rose 2.5 per cent from the prior-year period, but declined 0.3 per cent from the first quarter, Zillow said.