Home Prices rise in 3Q but Recovery Expected to Be Uneven

By Sari R. Updated on 10/23/2012

Prices of U.S. homes rose 1.3% in 3Q, but according to Zillow, the recovery won’t be even.  This increase in 3Q indicates the fourth quarter in a row with increases.  Analysts predict that home values will slightly rise and fall before returning to the long-term national housing price average.  Home values will more than likely decrease to the negative range in some markets as a result of the home buying season coming to a close.  This doesn’t mean that recovery isn’t happening, but it does mean that consumers are confused.  Consumers can expect to see home prices scrape along the bottom for a while before they will start to increase.

As an example of this confusing recovery, take Atlanta and Phoenix into account.  In Atlanta, home values fell 2.2% from quarter to quarter and declined 4.8% from year to year.  In Phoenix, home values rose 5.9% from quarter to quarter and saw an increase of 20.4% from year to year.

Most metropolitan areas had a decrease in values for 3Q as opposed to 2Q; this can be attributed to the end of the home-buying season.  Analysts predict that home values will increase by 1.7% by 3Q 2013 and that home values will increase 1.7%.  There are currently 183 out of 252 markets that have hit a bottom, and 41 more markets are expected to also hit bottom in the next year.

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