The value of homes fell in the first quarter of 2011 at a faster rate than any quarter since Q4 of 2008, dropping 3%, according to Zillow's first quarter real estate market reports. The U.S. housing market isn’t done taking it on the chin, either; according to data released on Monday, the real estate market is no longer due to bottom out in 2011. Zillow has revised its forecast for that event to 2012.
Housing has now declined 8.2% YOY, to $169,600, and home values have lost 29.5% since peaking in June of 2006. Negative equity and foreclosures are also both up for the quarter, with the former hitting a new high of 28.4% of homeowners owing more than their homes are worth—that’s up from 27% in Q4 of 2010. Foreclosures had fallen in Q4, thanks to moratoriums by banks in response to the "robo-signing" furor, but in Q1 of 2011 the pace of foreclosure resumed. One out of every 1,000 homes was lost to foreclosure in March.
Dr. Stan Humphries, Zillow’s chief economist, said in a statement, "Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011."
He continued, "We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won't see a bottom in home values until 2012 or later."
Among regional markets, only Fort Myers, Fla., Champaign-Urbana, Ill. and Honolulu, Hawaii metropolitan statistical areas saw home values actually appreciate in the quarter. Home values in those regions saw increases of 2.4%, 0.8% and 0.3%, respectively. In the Sarasota, Fla. metropolitan statistical area, values remained flat. The other 97% of the 132 markets Zillow tracks showed declines.
Read how home values were at Depression-era levels last year at AdvisorOne.com.