This article came from Real Estate Technology News (free news not paid subscription). I hope it is ok to post it on SOT. Anyone with a crystal ball? I like my job and don't want to find a new one.
>>>Nearly one-third of homes purchased since 2003 burdened with negative equity
Recent market reports show U.S. home values for the second quarter showed the largest year-over-year decline in the past 12 years.
(8/13/2008)
Real estate Web site Zillow has released real estate market reports for the second quarter of 2008. According to the expanded reports, U.S. home values for the quarter showed the largest year-over-year decline in the past 12 years.
The national average home value dropped 9.9 percent from the second quarter last year and 1.7 percent from the first quarter of this year. According to the Seattle-based Web site, the median U.S. home value has not been this low since the fourth quarter of 2004, and 29.1 percent of homeowners who purchased since 2003 are left with negative equity.
The reports also show that homeowners who have experienced the most significant declines in value are at the greatest risk of owing more than their home is currently worth. The highest rates of negative equity are among those who purchased in 2006, when most markets peaked, as 45 percent of those buyers across the U.S. now face negative equity after placing a median down payment of 10 percent.
According to Zillow, the increasing rates of negative equity coupled with rising rates of foreclosures continue to have an impact on the real estate market. Nationwide, 23.7 percent of homes sold during the past year sold for a loss, while nearly 15 percent of sales were foreclosures.
"The second quarter is the sixth consecutive quarter of home value declines, and we see little promise of turnaround in the short term, as the rates of decline have yet to slow and, in fact, actually accelerated in many markets," said Dr. Stan Humphries, Zillow's vice president of data and analytics. "The high rates of negative equity are having a direct effect on home sales figures as we've seen considerable growth in foreclosure transactions and homes selling for a loss."
Although a majority of markets reported year-over-year depreciation this quarter, 90 percent returned positive annualized appreciation over the past five years and every market has shown positive appreciation of as much as 6.5 percent over the past 10 years according to Zillow’s market analysis.<<<
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