Wednesday, August 13, 2008

One Third--Or More--of New Owners Owe More Than House is Worth

Recently, Zillow.com, the Internet provider of home valuations, asserted that many homeowners are delusional.

Today, they have their 2Q 2008 Market Report, which has some not unexpected numbers (unless, of course, you're a delusional homeowner).

Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth
, according to Zillow.

Second-quarter home prices fell 9.9 % from a year earlier, giving 29 % of owners negative equity.

For those who bought at the 2006 peak of the housing market, 45 % are now underwater,
Zillow said, as reported by Bloomberg.

Our MSA is too small to appear on Zillow's list of valuations. Richmond, however, makes the cut. During Q2 2008, 47.4% homes lost value, and 13.2% have been sold for a loss.

For the past 12 months, 60.9% lost value, and 10.9% sold at a loss.

And since the Central Va/Richmond peak was, arguably, later than 2006, we still have a ways to deflate....

View Zillow.com's 2Q Market Report, including a clickable national map, here.

4 comments:

Anonymous said...

I'm used to ignoring the hysteria on this blog, so I hesitate to ask: how does the reported fact "almost one third" get sensationalized in the headline to "one third -- or more"?

brooklyn bob said...

ms. anonymous still drinkin da kool aid

Real C'ville - The Bubble Blog said...

Anonymous,
Are you unclear on what this sentence means? "For those who bought at the 2006 peak of the housing market, 45 % are now underwater...."

That's how we get from 'One Third' to 'Or More.' "Being Underwater" is a casual phrase for a mortgage that has negative equity--which means the buyer owes more on the mortgage than the property is worth.

You may also read the entire article, which is linked on the post--and go ahead and educate yourself.

What you think is "hysteria" is actually the sad state of the United States Economy--declining in value house by house, every day.

There are plenty of links on this blog to credible media sources--if you think the blogosphere is iffy. You can also look at the blogs linked under "Bubble Blogs" if you prefer to stay in the blogosphere. If you're heavy into numbers and stats, don't miss "Calculated Risk" or the "Mortgage Lender Implode-O-Meter" which are linked under Live Blog Updates.

Cheers.

Montpellier said...

Bloomberg is a pretty reliable source, certainly they at least check their facts. This will be a long, slow trainwreck - neither banks nor borrowers will willingly take the loss - this will grind it's way through the courts.