Higher Values May Help Homeowners Avoid House Repossession

by Peter Vernon on Stop Foreclosures

For the second consecutive month, property values in San Diego County, California rose slightly by 1.55 percent from May to June.

Economists said that the increase may not be significant but what counts is the upward trend. They said that a higher property value means homeowners are more likely to avoid house repossession if they think that they could get equity on their homes.

They are hoping that the upward trend would mean an end to the housing crisis. The Standard and Poor’s/Case-Shiller Home Price Index showed that home prices are starting to increase in many large cities across the county.

Additionally, recent market data showed that home price declines have started to slow down, incurring a slight gain on month-to-month basis or quarter-to-quarter. However, year-over-year numbers were still not encouraging.

Other developments that fueled the recovery expectations of economists include the 1.4 percent increase in the national price index in the second quarter compared with the first quarter. The second quarter rise was the first in almost three years.

Furthermore, the house price index released by the Federal Housing Finance Agency showed a gain of 0.5 percentage point in June after a revised 0.6 percent rise in May.

According to industry analysts, higher home prices would greatly help in hastening the recovery of the housing market. They said that potential buyers who are just waiting on the sideline would decide to jump on the market if they know prices have already hit bottom and increase will follow.

Already, overbidding and multiple offers on foreclosure properties were reported in San Diego County, indicating that buyers’ interests are growing. Market data showed that July single-family resales grew by 3 percent in San Diego and 12 percent in California compared with the same month last year.

Analysts are welcoming these upward trending in prices as good news. They were concerned that the glut of foreclosure houses on the market would continue to pull down home prices. But some are skeptical about the figures reflected in the price index, saying that they do showed a decline in sales of foreclosure houses that were dominant just a few months ago.

About six months ago, majority of industry experts were expecting housing prices to fall further by 10 percent nationally. And they were also expecting that the price drop would trigger another wave of foreclosures and dampen economic recovery efforts.