Zillow reports June has lowest home depreciation since start of recession

Zillow recently reported that June 2011 experienced the lowest depreciation rate in the housing market since the onset of the recession in June 2006. Home values in June dropped 0.08 percent from May, and 6.2 percent from levels in June 2010 when the federal tax credits were stimulating the market.

In a period with no federal tax credits, the slowing depreciation of homes is a possible indicator of the market reaching the bottom, with home prices having nowhere to go but up. According to Zillow, a weak job market, a backed-up inventory of foreclosed properties, poor consumer confidence and the recent downgrade of the U.S. credit rating continue to prevent buyers from taking advantage of the low prices.

The report shows a national foreclosure rate of 0.1 percent, with re-sales of distressed properties making up 20 percent of the national sales in June. But some housing markets are expected to increase their average home price in 2012, including Tacoma, Washington, and Palm Bay, Florida.

In an interview with Fiance Daily, David Stiff, chief economist at Fiserv, said home prices are expected to stabilize in about 62 percent of metropolitan areas by the end of 2012, with Tacoma anticipating a 24.9 percent increase in average home price, and Palm Bay jumping up 18.3 percent.  

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