Middle Tennessee Real Estate News

More homeowners owe more than their homes are worth
Nashville Business Journal, Tuesday, August 12, 2008
A new report shows U.S. home values dropped nearly 10 percent in the second quarter, leaving almost one-third of homeowners who bought in the last five years "under water" on their mortgages.
"The second quarter is the sixth consecutive quarter of home value declines and we see little promise of turnaround in the short-term as the rates of decline have yet to slow and, in fact, actually accelerated in many markets," said Stan Humphries, Zillow's vice president of data and analytics,
According to the report from Zillow.com, which tracks home valuations, second-quarter prices fell 9.9 percent from last year and were 1.7 percent lower from the previous quarter. The average home value was $206,919. Zillow said the median U.S. home value has not been this low since the fourth quarter of 2004.
One in four homes sold in the past year was for a loss and foreclosed homes accounted for 50 percent of all home sales.
In the Washington area, according to Zillow, all home values fell 1.9 percent to an average of $368,177 between 2007 and 2008. Single-family home values tumbled 13.5 percent to an average of $407,348. Local owners who purchased their homes in 2006, with 10 percent down, are seeing negative equity of $15,517 or 4.7 percent , according to Zillow. The median owner equity in homes bought in 2007 is down by $717 or 0.2 percent. Homes bought this year have positive equity, on average, by $55,679 or 18.3 percent.
In the second quarter, 63.4 percent of homes in the Washington area lost value -- 42.7 percent were sold for a loss and 24.9 percent were foreclosure transactions. Year over year, 90.8 percent of area homes lost value, 29.6 percent were sold for a loss and 17.5 percent were foreclosure transactions.
Things are rosier for people who purchased their homes in 2003, with 15 percent down, before the housing market crumbled. According to Zillow, those folks have seen an increase of $117,500 in their home values, up 52 percent from the time of purchase.