Home Value Analysis Finds Unbalanced Recovery

A Zillow Inc. analysis of home values in different zip codes for the three months ended in April—taking into account home sales and appraisals, among other factors—shows an unbalanced housing recovery and emphasizes the influence of location on residential values. As home sales grow and available supply narrows, home values have held up or are beginning to rise in neighborhoods with good public school systems, low crime rates, and nearby transportation corridors. However, other neighborhoods—especially in the exurbs—are not yet in recovery mode. The report shows that home values during the three-month period rose in nearly 94 percent of Phoenix zip codes, 90 percent of Denver zip codes, and 33 percent of Seattle zip codes, while they fell in 40 percent of Washington, D.C., zip codes. Although buyers were willing to commute longer distances to achieve homeownership during the boom years, they are unwilling to do so now. Redfin CEO Glenn Kelman says, "The marginal neighborhoods won't do well until the so-called desirable neighborhoods are completely fished out." He adds that these communities could see rising foreclosures due to a large "shadow inventory." Source: "Housing Prices Rise, But Not for Everyone," Wall Street Journal (June 20, 2012).