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Business & Technology

Home prices up 5.9% in 2012, Zillow finds

January 22nd, 2013 3:52 pm by Kate Gibson,MarketWatch (MCT)

NEW YORK — The value of American homes climbed 5.9 percent in 2012, the largest annual gain since the summer of 2006, or near the peak of the housing bubble, according to data released Tuesday by real-estate information provider Zillow Inc.


The jump is roughly double the historical average, which has home values climbing about 3 percent a year, Zillow said.


“Good news for homeowners after years of poor performance,” Stan Humphries, Zillow’s chief economist, said in a statement. But Humphries cautioned consumers against expecting 2012-like gains in the future, saying that “we expect this recovery to continue into 2013, but at a more sustainable pace.”


In 2013, the company forecasts U.S. home values rising 3.3 percent, or more in line with historical norms.


Strong demand coupled with limited inventory bolstered home prices in many markets, with 254, or 69 percent, of the 366 metro areas analyzed showing home-value gains last year.


Just Cincinnati and Chicago failed to show annual and quarterly increases in the final three months of 2012.


As home values climbed in the fourth quarter, foreclosure activity lessened, with 5.22 of every 10,000 homes nationwide facing foreclosure in December, down 2.2 homes per 10,000 year-over-year and down 1.2 homes from the prior quarter, Zillow said.


Foreclosure resales represented 12 percent of the market in 2012’s final quarter, down 4 percent from the end of 2011 and down 0.3 percent from the third quarter.


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