Although South Florida home sales are chugging along at a boom-time pace and outperforming the national real estate market on a volume basis, home values continue to experience far more turmoil than the national market, a new report from real estate firm Zillow shows.
In the first three months of 2011, Zillow’s home value index for Miami-Dade, Broward and Palm Beach counties dipped to $137,300, a 12.8 percent decrease from the same quarter last year. The national home value index was $169,600, down 8.2 percent.
Sales of single-family home and condos rose each month during the first quarter, but the increases were propelled by all-cash deals to buy cheap foreclosures.
“We are going to have the sales volume because at the low-end prices are going to continue to be [low],” said William Hardin, professor of finance and real estate at Florida International University. “In the end, those distressed sales are going to bring down values in the neighborhood.”
Home values have fallen 55.4 percent from their peaks in June 2006, back down to April 2002 levels. Nationwide, home values have fallen 29.5 percent from 2006 peaks.
The problem of negative equity remains an especially staggering one in South Florida: 47.7 percent of all single-family homes with a mortgage are underwater, up from 43.5 percent last year. Nationally, the negative equity rate is 28.4 percent.
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Read: “Brisk home sales don’t stop decline in prices,“ an article by MiamiHerald.com.