The final quarter of 2011 brought another drop in home values, with prices falling 1.1% from the third quarter, suggesting housing has yet to reach a bottom, according to Zillow (Z).
The real estate database firm said home values fell 4.7% for all of last year and are expected to continue their downward trajectory in 2012.
Still, the value drops forecasted by Zillow for this year are not as deep as those experienced in 2011. In addition, several key markets are likely to reach bottom before the end of 2012.
Zillow expects a 3.7% decline in home values in 2012, with markets in Arizona and California nearing a bottom as investors intrigued by falling prices and low interest rates acquire homes in those states.
The Zillow home value index ended 2011 with the average home priced at $146,900.
Markets expected to no significant home price increases this year include Dallas, Denver, Miami, Fort Lauderdale, and Tampa, Fla., New York, Pittsburgh, San Diego, and San Francisco.
“While it may be disconcerting for homeowners to see values nationally fell at a fairly rapid clip at the end of last year, that trend won’t last through 2012,” Zillow Chief Economist Stan Humphries said. "The fourth quarter’s weak performance proves that pronouncements of a bottom in home values have been premature, but the good news is that 2012 will prove to be a better year than 2011."
The foreclosure rate edged up slightly in December, with 8.2 out of 10,000 homes landing in foreclosure, up from eight homes out of every 10,000 homes in November.
Foreclosure sales in December represented 19.1% of all sales, rising steadily from August when 17% of sales were foreclosures.