Residential property values in US cities took a hit last month, falling by 0.1%, but it isn’t a cause for concern, according to the August index from Zillow.
It is the first time that prices have fallen in nine months but they are still up on a year on year basis, seeing an increase of 1.7% since August 2011.
Major markets that saw home values edge downward from July to August after experiencing prior increases included the Chicago which was down 0.7%, New York down 0.3% and Boston down 0.2%.
Home values continued to climb in other major cities including Phoenix where they increased by 1.6% and Miami-Fort Lauderdale where they were up by 1%, although the rate of increase was smaller in August.
The rental market is continue to rise with rent up 0.2% month on month and n5.9% year on year, the Zillow rent index shows.
Nationally, rents have increased in seven out of the past 12 months. Rents rose by 12.8% year on year in Chicago, by 12.4% in Baltimore and by 10.5% in Philadelphia.
‘Home values took a small hit in August, but this shouldn’t be cause for alarm. The back half of the year is always softer than the front half, and this year is no exception,’ said Zillow chief economist Stan Humphries.
‘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,’ he explained.
The index also shows that foreclosures continued to decline in August, with six out of every 10,000 homes in the country being foreclosed. That was down from 6.4 out of every 10,000 homes in July.
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