Zillow: House Prices Continue to Rise

Is this a turning point or a dead cat bounce?  I’d say it’s signs of positive improvement and I am infinitely more bullish on housing than I was over the last few years, but I still don’t think we’re off to the races here…

More via Zillow:

Zillow’s October Real Estate Market Reports, released today, show that national home values rose 1.1% from September to October to $155,400 (Figure 1). This is the largest monthly increase since August 2005 when home values rose 1.2% month-over-month. October 2012 marks the 12th consecutive month of home value appreciation, further evidence of a durable housing market recovery. On a year-over-year basis, home values were up by 4.7% (Figure 2) in October 2012 – a rate of annual appreciation we haven’t seen since September of 2006, before the peak of the housing bubble. Rents declined in October, depreciating by 0.1% from September to October. On an annual basis, rents across the nation were up by 5.4% (Figure 3). The Zillow Home Value Forecast, which is now available on a monthly basis, calls for 1.5% appreciation nationally from October 2012 to October 2013. Most markets have already hit a bottom and 40 out of the 256 markets covered are forecasted to experience home value appreciation of 3% or higher.

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • http://www.nowandfutures.com bart

    Just using the CPI-U to help do an apples to apples comparison on the Case Shiller 20 since the peak shows nothing but lower highs and lower lows.

    http://www.nowandfutures.com/images/case_shiller_housing_recovery.png

    The rhyme is with the 1990s housing market.

    http://www.nowandfutures.com/images/case_shiller_housing_recovery3.png

  • jswede

    on the demand side we have 30% of home buying all cash, and much of that is PE/hedge funds buying sfh to rent out. on the supply side we have foreclosure backlogs in the judicial states.

    and now rent is declining.

    wow would it ever get ugly if the PE/hedge funds decided they don’t want to be landlords anymore.

  • LRM

    I saw this a couple of days ago:
    http://finance.yahoo.com/blogs/daily-ticker/house-prices-nowhere-near-bottom-says-analyst-125114464.html?l=1

    I do not know this Keith Jarow person in the interview or his business but am reposting it as another point of view.
    As Cullen also posted recently it is better not to be too negative but this Jarow fellow is not believing this good data .
    Anyone know this Jarow?

  • http://stockcharts.com/public/1005563 Ordely Bull

    It’s all floating on the same tide; I mean different assets including housing. From the contrarian perspective housing is actually the best bearish bet with all the giddy talk in the financial media and flood of “good news” . The froth may be just pulling back last.

  • Andrew P

    Jarow has been a big bear on Housing for a long time. He seems to pay most attention to the NYC/northeast market. I’m not saying he is wrong, but he is ignoring the fact that the Fed can fund the banks to hold that foreclosed inventory for almost eternity and dribble it out very slowly. You can’t fight the Fed.

  • asha101

    In 15 years, renters will buy the house for you. Rents are not going down. They are and they will continue to go up. It’s actually the perfect time to go all in if you have good credit to get the cheap loans.

    A guy may be speeding all the time and never worry about getting caught if he has no previous experience of being caught. After he’s been caught once, even if he started to drive carefully, he still worries although the chance of being caught again is much lower than before.

    Memory fools people to draw incorrect conclusions about probability. In 09 they are afraid to buy stocks. Last year they are afraid to buy home builders. Today they are afraid to buy houses. Same story repeats.

  • inDC

    You can’t fight the Fed, but the banks can’t fight the continuing deterioration of vacant homes forever. Every day a home sits without the benefit of a constant ambient temperature leads to mold growth; sits without an occupant to note and repair minor problems such as damaged flashing means rain water seeps in; sits without a human presence, meaning mice, squirrels, birds, etc start to move in; sits without electricity meaning sump pums don’t work during heavy rains, thus leading to flooded basements; the home loses value. Have you ever smelled a home in South Florida which has not had A/C running for six months? And I am not even mentioning the fact these homes — with their darkened windows and 2 foot high grass — become targets for vandals, thieves, drug dealers, and the homeless. These homes are a slow-moving but deadly epidemic driving down neighborhood values and quality of life. This epidemic will eventually catch up to the banks, who will then put it on the backs of shareholders.
    Yes, it is wonderful a tiny fraction of homes on the very low and very high side of the Bell curve are finding cash buyers — but this activity is not sustainable and certainly not indicative of overall housing market health.