Home prices slide further
One in five housing markets In the United States entered a second leg of home price declines in late 2009, after showing price increases for nearly half of last year, according to Zillow.com, a real-estate Web site.
Besides, one of every five U.S. home owners had more debts than their property was worth in the fourth quarter, a report by Zillow.com said, adding that it was a trend that posed a serious threat to the U.S. housing market’s recovery.
Such home owners, those with “under water” mortgages, tend to default in their repayments and foreclose. They will be unable to sell their homes because they will have to generate more cash to settle their debts.
In 29 of the 143 markets tracked by Zillow, including Boston, Atlanta and San Diego, prices flattened or began to drop again in the second part of last year.
The percentage of American single-family homes with mortgages in negative equity rose to 21.4 percent in the fourth quarter from 21 percent in the third quarter, it said.
U.S. home values declined again in the fourth quarter, as the Zillow Home Value Index fell 5 percent year-over-year and down 0.5 percent quarter-over-quarter, to $186,200. It was the 12th consecutive quarter of year-over-year declines, the report showed.
Zillow forecasts a definitive bottom in home values in the second quarter of 2010, Stan Humphries, Zillow chief economist, said.
“It is important to note, however, that the arrival of the bottom does not mean that recovery is around the corner,” he said.
Home values in 29 markets, including the Los Angeles and New York metro areas, increased on a month-over-month basis throughout the fourth quarter. The rate of increase, however, slowed from November to December in 21 of those markets.
More than one in every thousand homes were foreclosed, the highest since Zillow began recording national foreclosure data in 2000, the report showed.
The next few months will likely show more declines in home values in most markets, Humphries said. But he expects that, on a national basis, home prices should still hit bottom by the middle of the year.
“Thereafter,” he said, “home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.”
