Rock bottom: Zillow reports first value increase since 2007

Home values in the United States have reached a bottom, according to the Zillow Home Value Index.

The Seattle-based company’s gauge rose on an annual basis for the first time since 2007, increasing 0.2 percent year-over-year to $149,300, according to Zillow’s second quarter Real Estate Market Reports. Values have risen for four consecutive months.

Nearly one-third of metros, or 53 of the 167 covered by the Real Estate Market Reports, posted annual increases in home values. The largest increase came in Phoenix, where home values are up 12.1 percent from the second quarter of 2011 to the second quarter of 2012.

The Seattle area was up .7 percent over the last month, up 2.3 percent from last quarter, yet down .3 percent from this time last year, Zillow reported.

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“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” said Stan Humphries, Zillow’s chief economist.”The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.

“Of course, there is still some risk as we look down the foreclosure pipeline and see foreclosure starts picking up. This will translate into more homes on the market by the end of the year, but we think demand will rise to absorb that, particularly in markets where there are acute inventory shortages now. Looking forward, we expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity.”