After increasing continuously for nine months, home values in some metros dropped slightly in August from July levels.
A month-over-month decline of 0.1 percent to $152,100 was recorded in August, according to the August Zillow Real Estate Market Reports.
However, home values were up by 1.7 percent from the same time last year.
"Home values took a small hit in August, but this shouldn't be cause for alarm," Zillow chief economist Dr. Stan Humphries said in a statement. "The back half of the year is always softer than the front half, and this year is no exception. We've been encouraging folks to focus on the longer term trends and not monthly blips. Home values will rise a little and fall a little, month by month, in the near future, but we believe the overall trend will remain positive albeit still below normal rates of appreciation."
Some of the metro markets that saw a drop were Chicago (-0.7 percent), New York (-0.3 percent) and Boston (-0.2 percent).
But Phoenix and Miami-Ft. Lauderdale metros recorded an increase in August. However, the rate of increase was smaller compared to previous months, the report said.
Declining foreclosure seems to have hiked home values in these metros. For instance, the report shows that foreclosures continued its decline in
August with six out of every 10,000 homes being foreclosed. In July, it was 6.4 out of every 10,000 homes, the report said.
“The pace of homes entering the foreclosure process is expected to decline gradually, barring another severe economic shock that sends the slowly rebounding housing market into a tailspin,” the Wall Street Journal reported quoting industry experts. “But that decline is likely to continue playing out unevenly, in part because of the differing approaches to handling foreclosures from state to state.”
Timothy M Warren Jr of Warren Group, too, feels that declining foreclosure is a sign of housing recovery. "It appears there is a downward trend in foreclosure activity. A strong economy and recovering housing market is helping lift consumer confidence. This news paired with banks' return to standard foreclosure processes is also helping," Zip Realty quoted him as saying.