Home Values in Further Decline, Zillow Says

MBA (9/15/2008 ) Murray, Michael
More than 60 percent of homeowners in the United States believe their home’s value increased or stayed the same during the past year, when in reality, 77 percent of U.S. homes lost value, said Zillow.com.
A second quarter market report from Zillow that assesses housing trends for 165 different markets, reported that home values declined 10 percent year-over-year nationwide, marking the sixth consecutive quarter of national declines.

The Office of Federal Housing Enterprise Oversight (now the Federal Housing Finance Agency) House Price Index fell 1.7 percent in the second quarter from a year ago. The HPI is based on data from both purchase and refinance transactions from Fannie Mae and Freddie Mac.

“These continued declines have pushed home values back to levels from the fourth quarter of 2004, with some markets falling back to 2000 levels or in the case of Detroit , 1999,” the report said.

Zillow reported 29.1 percent of homeowners who bought since 2003 are now "underwater" on their mortgage. When most markets peaked, 45 percent of people who bought in 2006 were underwater, and the number surpasses 90 percent of 2006 buyers in many areas of California.

In the second quarter, 32.7 percent of every home sold did so at a loss, Zillow said. By comparison, this figure was 12 percent in the second quarter 2007, the report said.