Day Trender - News, Business, Real Estate News, Financial, Tech, World

Prices Fell in 97% of U.S Markets in First Quarter

Zillow reported on Monday that U.S. home prices suffered their biggest decline since 2008 in the first quarter, leading to percentage of “underwater” homeowners, or those owing more on their loans than their home is worth, rising to 28.4 percent.  Home values declined 3 percent from January to February, the biggest one-quarter drop in values since the fourth quarter of 2008, at the height of the nation's worst recession since the 1930s, according to Zillow's report.  Prices have now fallen nearly 30 percent from peak levels set in June, 2006, and a bottom is unlikely to come this year, Zillow said.

The data also pointed out that the nation's negative equity rate has increased from 27 percent in last year's fourth quarter to 28.4 percent during the last three months, an increase likely driven by the falling values.   

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” commented Zillow's Chief Economist Dr. Stan Humphries in the report.  “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

Among the factors contributing to falling price levels during the quarter was an increase in foreclosures as banks ended voluntary moratoriums on seizures and resumed normal foreclosure practices.  The moratoriums caused a significant dip in foreclosures late last year as regulators investigated lenders' practices amid allegations of “robo-signing” and other improprieties.  In March, one in every 1,000 homes across the nation was seized.

Among the nation's 132 individual markets that Zillow tracks, only 4 saw stable or rising home prices over the quarter.  Prices remained flat in Sarasota, Florida, while the Fort Meyers, Florida, Champaign-Urbana, Illinois, and Honolulu Hawaii markets enjoyed increases in home prices from 2010's final three months.