Housing Market Is 'On the Mend': Zillow Economist
The positive momentum for the U.S. housing market continues Tuesday.
U.S. home prices rose 1.3% in the third quarter versus the second quarter and jumped 3.2% from the same period in 2011, according to Zillow's latest Real Estate Market Report.
The quarterly gain marks the fourth consecutive month of rising home values and the best uptick in prices since the housing slowdown began in March 2006.
"Nationally, the housing market is on the mend," says Zillow's chief economist Stan Humphries in an interview with The Daily Ticker. "We are actually seeing not only a pretty strong performance in home values but also a consistent performance now."
While home prices are up 3.2% on the year, Humphries expects growth to moderate next year. The real estate Web site predicts home values will increase 1.7% over the next twelve months because of the high number of homeowners who are underwater on their mortgage.
Even though home values continue to rise nationally, it will remain an uneven recovery for some time, notes Humphries. It's all dependent on the market. For example, home prices are up in large metros like New York, Los Angeles, Washington D.C. and Miami but are down considerably in areas like Atlanta and Philadelphia.
"Real estate has always been very local" except during the housing crash when most markets were in decline, says Humphries. "But now I think the local dynamics are really reasserting themselves."
Many political battleground states were also in the red last quarter, including New Hampshire, North Carolina, Ohio, Virginia and Wisconsin.
"It is stunning to me how little we are talking about housing in the presidential election," says Humphries. "I think part of it is because while we are seeing some good news on the housing front overall."
Humphries says the housing market is still down 21% from its peak, one reason why the president may not be talking about housing as much as he could be. Moreover, because Obama has pursued centrist housing policies, it makes it difficult for the Republican candidate Mitt Romney to tout policies that very conservative, says Humphries.
Of the 252 markets that the Zillow Home Value Forecast follows, 183 have already "hit bottom" and 41 more are expected to hit a low point in 2013.
"[Overall] it's been a long time since we've seen a housing market this good," Humphries adds.
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