By some measures, the U.S. economy is slowly creeping its way back from crisis. Employers created nearly a quarter million jobs in April, the Dow has bounced back from its 2009 plummet, and some economists are predicting a drop in gas prices in the near future. But Americans--particularly those with for-sale signs on their lawns--shouldn't break out the champagne just yet.
According to real-estate website Zillow.com, home values dropped 3 percent in the first quarter of 2011--the largest quarter-over-quarter drop since 2008. And this continued an unhappy trend: Altogether, U.S. home values dropped 8.2 percent from March 2010 to March 2011. The phenomenon is widespread--of the 132 cities for which Zillow has calculated home value estimates, only nine posted improved or even flat home values between February and March, and only four saw increased or flat home values during the first quarter of 2011. Furthermore, these figures do not include foreclosed homes or foreclosure re-sales, which could further drag down aggregate estimated home values.[Check out editorial cartoons about the economy.]
These are the nine cities in which housing prices bucked the national downward trend in March 2011, according to Zillow's home value index.
|Metropolitan Area||Current Median Est. Home Market Value||Monthly Change||Quarterly Change|
|Fort Myers, Fla.||$121,000||1.00%||2.40%|
|Santa Cruz, Calif.||$473,100||0.10%||-0.30%|
|New Haven, Conn.||$212,900||0.00%||-0.50%|
|El Centro, Calif.||$110,500||0.00%||-0.60%|
These growth rates only provide a snapshot of larger trends in these cities, whose housing markets are in widely varying degrees of health. Honolulu, for example, is the only city for which Zillow estimates that home values increased year-to-year, with a growth rate of 1.8 percent since March 2010. By contrast while Pueblo, Colorado is on the list for March, home values there are down more than 18 percent over that year.
Morris Davis, academic director at the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison, says that much hand-wringing over this most recent evidence of housing value declines may be unjustified. "We're not talking about a freefall in house prices. It's that somehow there are modest declines in various places," he says. Davis puts the housing value decline into the broader context of the recent recession and housing market collapse. "People are talking about all the bad news now, but really the bad news happened," he adds, pointing to the sharp drop in housing values since 2006, a decrease that Zillow estimates at 29.5 percent.
There may be little reason to panic, then, about the U.S. housing situation. But for now, sellers in places like Fort Myers and Honolulu may be resting easier than other homeowners around the country.