RISMEDIA, June 14, 2010—Homes values fell 0.38% nationally from March 2010 to April 2010 and were down 4.1% from their levels in April 2009 (see Figure 1) for monthly and annualized appreciation). The rate of monthly depreciation has remained fairly steady since January, albeit at rates slightly above October 2009 levels when we recorded the smallest month-over-month decline in recent years (-0.27%).
Homes values declined month-over-month in 87 (70%) of the 124 metropolitan statistical areas (MSAs) tracked by Zillow this month, and year-over-year declines (defined as a decline of more than 1%) in home values were recorded in 96 (77%) of the 124 metros. Foreclosure activity continued to increase nationally with 0.11% of homes in the U.S. being foreclosed in April.
The supply and demand picture continues to look challenging, to say the least. On the supply side, LPS and the Mortgage Bankers Association (MBA) both recently came out with estimates of shadow inventory that put the number of REO homes on banks’ books at 1.1 million and the number of seriously delinquent mortgages and foreclosed homes in the range of 5 million. Zillow’s first quarter Homeowner Confidence Survey pegs the estimated number of sidelined sellers (sellers who are very likely to try to sell in the next 12 months if they see signs of market improvement) at 5.3 million homeowners. Data on mortgage applications from MBA and pending sales data coming in now from local markets suggests that housing demand plummeted after the expiration of the first-time home buyer tax credits at the end of April.
We expect to see pending home sales dry up significantly in the May pending home sales report from the National Association of Realtors. Existing home sales will continue to stay robust through the end of June, when contracts that were signed by the end of April must close in order for buyers to receive the tax credits. Expect them to fall off precipitously thereafter as we pay back the demand we’ve pulled into these months.
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