U.S. ‘Underwater’ Homeowners Increase to 28 Percent, Zillow Says

[marmar]

(Bloomberg) More than 28 percent of U.S. homeowners owed more than their properties were worth in the first quarter as values fell the most since 2008, Zillow Inc. said today.

Homeowners with negative equity increased from 22 percent a year earlier as home prices slumped 8.2 percent over the past 12 months, the Seattle-based company said. About 27 percent of homes were “underwater” in the fourth quarter, according to Zillow, which runs a website with property-value estimates and real-estate listings.

Home prices fell 3 percent in the first quarter and will drop as much as 9 percent this year as foreclosures spread and unemployment remains high, Zillow Chief Economist Stan Humphries said. Prices won’t find a floor until 2012, he said.

“We get tired of telling such a grim story, but unfortunately this is the story that needs to be told,” Humphries said in a telephone interview. “Demand is still quite anemic due to unemployment and the fact that home values are still falling. And that tends to make people more cautious about buying.” .............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-05-09/u-s-underwater-homeowners-increase-to-28-percent-zillow-says.html

[no_hypocrisy]

1. My clients purchased their home the month before the bubble burst.

They've been paying the bank but not a single cent in equity yet nor in the foreseeable future.

That's underwater.

[notesdev]

3. I live in a development where EVERYBODY bought at the top of the bubble

literally, all their contracts were signed between Dec 2005 and Feb 2006, and we're talking about 300 units here. Ouchie! (I rent so the impact on me personally is limited but I can't help but feel the pain of those who have a now-severely-underwater mortgage.

[nonperson]

2. My brother just closed on a modest home

The title company told him there are another 30,000 foreclosures due to be filed in the next couple of months right here in New Jersey alone.

But hey, the banks, finance companies and Wall St. are all doing fine so it's no problem. No problem at all.

[SoCalDem]

4. Just about anyone who bought between 2002-2007 is underwater

with the exception of many midwest areas that never had a big boom..

The best that people can do is to hold on if they can, and appreciate that they have a roof over their heads and to resist with all their might, the removing of any equity they can muster..

[On the Road]

5. Zillow Used to Give Estimates That Were a Little Higher Than Appraisals

Now their estimates tend to be low. Foreclosures in poor shape appear to be factored right into the price along with retails sales of homes in good condition.

So the percentage underwater might be a bit high. But the general observation on the real estate market is still dead on.