RISMEDIA, Dec. 16, 2008-U.S. homes are set to lose well over $2 trillion in value during 2008, according to analysis of recent Zillow Real Estate Market Reports. Home values declined 8.4% year-over-year during the first three quarters of this year, compared to the same period in 2007.
“Underwater” was the real estate buzzword of the year. U.S. home values lost $1.9 trillion from the first of the year through the end of the third quarter, and were likely to fall further in the fourth quarter, leaving approximately 11.7 million American households owing more on their mortgage than their homes are worth. One in seven of all homeowners (14.3%) were underwater by the end of the third quarter.
“This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets – particularly those hit hardest in the downturn – showed smaller year-over-year declines than in the prior quarter. Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market.”
Thirty of the 163 metropolitan statistical areas (MSAs) covered in the Zillow Real Estate Market Reports showed gains in the Zillow Home Value Index3, or median value of all homes in the area, over the first three quarters of the year, with the Jacksonville, N.C. region seeing year-over-year appreciation of 4.9%. The change in value was calculated by averaging the year-over-year change in each of the first three quarters of the year.
Also performing well were the Winston-Salem, N.C. and Anderson, S.C. MSAs, with year-over-year increases of 4.1% and 3.5%, respectively, over the first three quarters of the year.
The Stockton, Calif. region fared the worst in the first three quarters of 2008, with home values sliding 32.3% year-over-year. The Merced, Calif. area followed with home values declining 31.2% year-over-year in the first three quarters of 2008.
For more information, visit www.zillow.com/mortgage.