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Housing Market Bottom: Still Underwater

Foreclosures resumed as banks worked through the documentation and foreclosure process issues that caused many of them to impose moratoriums last fall. In March one out of every 1,000 homes in the country was foreclosed.

Home prices fell faster in the first quarter of this year than at any time since the worst of the housing crisis according to the Real Estate Market Report released by Zillow.

The Seattle firm's Home Value Index fell to $169,000, down 3 percent compared to the fourth quarter of 2009, the largest quarter-over-quarter decline since the fourth quarter of 2008, and 8.2 percent compared to the first quarter of 2010.  The company predicted that the market will not reach bottom until 2012 at the earliest.

Zillow's index described the median valuation for a given geographic area on a given day and included the value of all single-family residences, condominiums and cooperatives. Data is aggregated from public sources by a number of data providers for 132 Metropolitan Statistical Areas dating back to 1996. Mortgage and home loan data is typically recorded in each county and publicly available through a county recorder's office.

Negative equity reached a new high with 28.4 percent of all mortgages now underwater. This is an increase of 1.4 percentage points since the previous quarter due to declining home prices. Home values have dropped 29.5 percent from the peak in June 2006.

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Dr. Stan Humphries. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, makes it almost certain that we won't see a bottom in home values until 2012 or later.”

Few markets were exempt from home value declines in the first quarter. The vast majority (97 percent) of the 132 markets in the study logged home value declines. Only the Fort Myers, Fla., Champaign-Urbana, Ill. and Honolulu, Hawaii metropolitan statistical areas experienced quarterly increases, with home values rising 2.4 percent, 0.8 percent and 0.3 percent, respectively. Home values in the Sarasota, Fla. remained flat.

– Courtesy of Market News Daily

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December 7, 2019, 3:52 am PDT

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