Zillow: Home Values Rise in Many Markets

National home values experienced the smallest decline from the first quarter to the second quarter in more than four years, decreasing only 0.4%, according to a Zillow Inc. real estate market report.

However, year-over-year home prices fell 6.2% to reach a national average of $171,600. Since peaking in June 2006, prices have dropped 28.8%.

Zillow found that 142 of 154 markets in the report experienced price depreciation over the entire year, but nearly two-thirds (94) of the markets saw price appreciation in the last quarter.

“While there are many positive signs in the second quarter, and it is clear the post-tax credit freefall of home values is over, we're not out of the woods yet,” said Stan Humphries, chief economist at Zillow. “It is very encouraging that two-thirds of markets in our report experienced home value appreciation, but we have to remember that this is coming on the heels of one of the worst quarters since the housing recession began.”

Despite many markets starting to see home values rise last quarter, only 25 have experienced two straight quarters of appreciation.

Pittsburgh had the highest quarterly price increase at 2.8%, followed by Detroit and Boston at 2.1%, respectively. The largest price depreciation last quarter was seen in Sacramento with a 2.7% difference, with Phoenix next on the list with a drop of 2.4%.

The report also revealed that negative equity fell to 26.8% of single-family homes with mortgages from 28.4% in the previous quarter. Meanwhile, the rate of foreclosure resales declined from its peak in March 2011 when 21.4% of all sales were in this category. In June, there were 19.7% foreclosure resales.

“We expect a bumpy road ahead. There will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” Humphries said. “There are still hazards in the form of a full foreclosure pipeline, high negative equity and fluctuations in demand.”