- Dennis Norman
The percent of American home owners with mortgages in a negative equity position fell to 21 percent in the third quarter of this year, down from 23 percent in the second quarter, as home values stabilized in the short term and more underwater homeowners lost their homes to foreclosure, according to the third quarter Zillow Real Estate Market Reports.
Year-over-year home values in the U.S. declined for the 11th consecutive quarter, falling 6.9 percent to a Zillow Home Value Index of $190,400. However, the rate of year-over-year decline shrank for the third quarter in a row, meaning home values did not decline as dramatically year-over-year in the third quarter as they did in the second or first quarters.
Foreclosure re-sales remained high, making up more than one-fifth (21.4 percent) of all U.S. home sales in September, and made up the majority of sales in several metro’s including Merced, CA (74.2 percent), Stockton, CA (69.3 percent), Madera, CA (68.7 percent) El Centro, CA (68.1 percent) and Las Vegas (67.5 percent).
So what does this all mean? Well, the first part of this is kind of a back-handed compliment….fewer homeowners are underwater because more of them have lost their homes this quarter…..I guess that’s good….unless you are one of the homeowners that lost your home. Next, prices are still falling, so, for the average homeowner their largest investment, their main asset, is worth less than it was last year, but the good news is it didn’t lose value at as fast of a pace as it did before….Sweet….well, sort of…..Finally, we are not out of the woods yet….if foreclosure resales make up 1/5 of the homes being sold I think that speaks volumes for the real state of the housing market.
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