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The real estate Web site Zillow.com reports today that American home values fell by $2 trillion in 2008.
“This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets – particularly those hit hardest in the downturn – showed smaller year-over-year declines than in the prior quarter. Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market.”
Only thirty of the 163 metropolitan statistical areas covered by Zillow showed gains over the first three quarters of the year. Jacksonville, N.C. led with year-over-year appreciation of 4.9%.
Other cities performing well included Winston-Salem, N.C. and Anderson, S.C. with increases of 4.1% and 3.5%.
The biggest loser: Stockton, Calif. with home values sliding 32% percent year-over-year. Merced, Calif. followed with values down 31%.
If you’re looking for a bottom Humphries says look for at least three consecutive quarters of improving year-over-year change in home values. Several markets, including the San Francisco, Atlanta and St. Louis regions, showed slight deceleration in declines from the second quarter to the third quarter.
Also look for
· Declining foreclosure rates.
· Increases in sales volume.
· And the amount for-sale inventory declining.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.