Home Values Plummet in October, the Most Since 2012

A new survey of housing values shows more than half dropped in October, the most since 2012.

Zillow’s latest “Zestimates” rankings showed that 53 percent of homes they surveyed registered declines, the most since 2012 and up from just 16 percent a year ago.

The most widespread value drops were in the West and the South, with some markets showing declines substantially larger than the national averages. Denver has the largest number of drops, with 91 percent of homes declining in value, followed by Austin, at 89 percent; Sacramento, 88 percent; and Phoenix and Dallas, both at 87 percent.

In contrast, home values in the Northeast and Midwest have had much more moderate drops but Zillow indicated that the number of value drops are increasing in those markets.

“Homeowners may feel rattled when they see their Zestimate drop,” said Treh Manhertz, senior economic researcher at Zillow in a statement with the new findings, “and it’s more common in today’s cooler market environment than in recent years.”

But he added, “relatively few are selling at a loss. Home values surged over the past six years, and the vast majority of homeowners still have significant equity. What we’re seeing now is a normalization, not a crash.”

As proof, Zillow reported that home values are up 67 percent since their last sale and only 4.1 percent of homes have lost value since they last sold. Still, Zillow cautioned that the continued softness in the housing market, racked by mortgage rates that have not declined as much as some had hoped, would continue indefinitely.

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