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Home values declining spells opportunity for buyers

Well, Zillow's August Real Estate Market report comes with mixed results for Philadelphia homeowners. While news is good nationally – homes in 26 of the top 35 metro areas are appreciating more quickly than the national average – it's not so good locally.

Homes across the country appreciated at a rate of about 3.3 percent last year, but the number crunchers at Zillow report that 43.4 percent of homes in Philadelphia actually decreased in value over the year. That rate puts us just ahead of Baltimore, giving Philadelphia the second highest percentage of homes decreasing in value among the 35 largest metro areas in America. Ouch.

Researchers at Zillow say the national numbers suggest that the housing recovery may be leveling off now that the recession is over. Nationally, home values are way up in cities including Dallas, San Jose and San Francisco, but are down in East Coast and Midwestern markets.

"We're not going in reverse, but we are hitting the brakes a bit in some markets," said Zillow Chief Economist Dr. Svenja Gudell. "It's easy to say the recession is over when a third of the biggest markets are more expensive now than ever before, but we're still seeing a number of homes losing value. The reality is there are still areas lagging behind in the recovery."

Zillow reports that before the market crash, about 21 percent of home values in Philadelphia were decreasing. That number has now more than doubled. Combined with rising rents (researchers say rates went up 2.1 percent last year), Zillow says the lagging housing market in Philadelphia points to opportunity for buyers.

In contrast, researchers say 97.8 percent of the homes in Denver are appreciating in value, which is a jump of 16.3 percent over last year.

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