Tuesday, May 10, 2011

Zillow: 28.4% or 16.2 Million Owners Owe More Than House is Worth. Prediction for Bottom Pushed to 2012.

If you're a BUYER, research carefully to avoid being  underwater in 2012.  Many who purchased with the 2010 Homebuyer Tax Cred are now underwater.  Just a small drop in price can quickly drag a home underwater when you factor in interest, and consider the upfront agent fees and closing costs.

In this area,  nearly 30% of mortgage holders  are at or near negative equity.  Virginia had a mighty big bubble, which is still deflating.  As Realtor @JimDuncan said, We're not at bottom.

SELLERS can act accordingly by underpricing the competition--if they have equity.  Gary Shilling's advice:  "Sell Your House YESTERDAY."
A prediction for a 2012 bottom seems a little bit optimistic, especially given the latest economic news (see links, below).  

ZILLOW's report maps the carnage in Q1 2011:
  • First Quarter Home Value Declines Match Worst of Housing Recession
  • Home Values Show Sharpest Quarterly Decline Since 2008
  • Negative Equity Rises to 28.4%
  • U.S. home values posted their largest quarter-over-quarter decline since Q42008, falling 3 percent. 
  • Home values have fallen 29.5 percent from their peak in June 2006.
  • Negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in Q4 2010, due to accelerating home value declines.
  • 57 Months of Price Declines  
Read the article from Bloomberg here,  the WSJ here. 

The bad economic news has piled on thick in the past 10 days:
Images copyright WSJ. 

WSJ video recapping Zillow's Q1 2011 report:

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