1 in 4 markets have negative or flat annualized change
Home values in the United States posted their seventh consecutive quarterly decline, falling 9.7 percent year-over-year to a Zillow Home Value Index of $202,966, according to the third quarter Zillow Real Estate Market Reports, which encompass 163 metropolitan areas.
The continued declines in value are causing more homeowners to sell their homes for less than the home’s original purchase price. Over the past 12 months, 30.2 percent of homes sold were sold for a loss, up from 23.7 percent at the end of the second quarter. In 17 markets-14 of which are in California-more than half of homes sold in the past year were sold for a loss.
The percentage of homeowners with negative equity remained fairly steady from the second to the third quarter as more foreclosures were completed and as median down payments rose in 61 markets. One in seven (14.3 percent) of all homeowners across the country has negative equity, and of homeowners who bought in the last five years, almost one-third (29.5 percent) are underwater.
Meanwhile 27 of the 163 metropolitan statistical areas (MSAs) covered by Zillow’s reports are experiencing longer-term impact, showing negative annualized value changes over the past five years, and 12 of the markets show flat five-year annualized returns. Most affected by long-term depreciation were hard-hit areas in California’s Central Valley, like Stockton, where the five-year annualized change is -3.8 percent. Also affected are areas like Greater Boston, where the five-year annualized change is -1 percent, and the Cleveland area, where the change is -0.8 percent.
Detroit experienced the worst overall long-term depreciation, with five-year annualized change at -3.1 percent and 10-year annualized change at 0.9 percent.