U.S. Home Value Decline Shrinks

2nd Quarter Slows Free Falling Prices
In a report released by Zillow today, U.S. home values dipped 12.1% to $186,500 in the second quarter of 2009 as compared with a year earlier. Consecutive quarterly declines have now reached double digits; however, the rate of decline shrank for the first time since prices began their tumble. Also, 37 of the 161 metro markets surveyed either posted an increase, stayed flat or showed a third consecutive quarter of a lessening decline.

Amidst some signs of recovery, various threats still loom on the market. High unemployment and negative equity rates threaten to create a new foreclosure wave, which obviously would hold prices down. Either way, inventories are likely to remain high, as the report also stated that nearly one third of all homeowners indicated they would be somewhat likely to put their houses up for sale if a recovery were to take place.

Uvestor Opportunity:
In the immediate term, continue to capitalize on good buying and selling conditions for affordable houses in the range of your market’s first-time homebuyers. Time is running out on the $8,000 federal incentive (as well as the peak buying season), so it is sensible to make a big push at unloading any such properties one is not prepared to hold through the winter.

For investors looking to add to their portfolios, the next twelve months have all the makings of another good buying year. Plentiful foreclosures are nearly a certainty, and home prices are not showing any signs of a dramatic recovery. For those with cash and enough time to hold through the crisis, the bargain prices represent the chance of a generation.