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Many home owners in the US at the bottom third of their markets are finally in a position to sell, according to the latest index data. Owners of the country's lowest valued homes emerged from 2014 in a stronger position than previous years, with home values up 6.8% year on year, the latest quarterly report from Zillow shows. Properties in the lower third of home values bottomed out in January 2012 with a median value of $84,100 but by December 2014 they had bounced back to a median value of $101,400. While home owners in the bottom price tier are still 17% below their pre-recession peak values, this is a distinct improvement from the 31% value loss they suffered when home values hit rock bottom in January 2012. Returning value means many with lower valued homes who had been in negative equity are now able to sell or refinance, boosting low end inventory, which has been tight for the past few years. Going into the home buying season in 2015, buyers can expect to find more homes on the market and less competition from all cash bidders, the report also points out. Metros with the biggest jump over last year in low end inventory are Las Vegas, with 66.% more low end homes on the market in December 2014 than December 2013, Riverside, with 47.3% more and Washington D.C. with 45.7% more. Homeowners of lower valued homes are emerging from negative equity and are able to sell just as many in the millennial generation prepare to buy homes, pushed into the housing market by rising rents and abysmal rental affordability. ‘In many ways, for the housing market to fully normalize, it has to start at the bottom. More lower end home sellers will help meet demand from entry level buyers, and these sellers in turn will re-enter the market in search of a slightly pricier home, which will entice more middle and upper tier sellers to list their homes,’ said Zillow chief economist Stan Humphries. ‘As the economy gets stronger, we expect more young adults to strike out on their own, moving out of friends' and parents' homes. This will create strong demand in coming months, especially for less expensive homes,’ he added. Rents continued to rise, and at the end of December the Zillow Rent Index had increased 3.3% year on year, to $1,345. Continue reading →
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