American homeowners will altogether lose $2 trillion in home value by the end of 2008, according to real estate experts at Zillow.com. The worst performing markets were in California while the best market was in Jacksonville, N.C.
Digital Journal -- As if the economic news couldn't get any worse. Not a surprise to many, a recently released report found that U.S. homes will collectively lose $2 trillion in value by the end of 2008. The report, released by real estate site Zillow.com, calculated home values have dropped 8.4 per cent during the first three quarters of 2008, compared with the same period in 2007.
As a comparison, U.S. homes fell $1.24 trillion in value in 2007.
One in seven of all homeowners (14.3 per cent) were "underwater" by the end of the third quarter, meaning 11.7 American households owed more on their mortgage than their homes are worth. Stan Humphries, Zillow's vice president of data and analytics, said in the press release:
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.
He pointed to some of the worst performing markets in the U.S.: the Stockton, Calif. region fared horribly in the first three quarters of 2008, with home values sliding 32.3 per cent year-over-year. Nearby Merced, Calif. area followed at second-worst with home values declining 31.2 per cent.
There's a small silver lining, though. The best performing metro region was Jacksonville N.C., where home values shot up 4.9 per cent year-over-year to $139,261 in the first three quarters of 2008. Anderson, S.C., prices climbed 3.5 per cent to $101,816 and State College, Pa., rose by 3.4 per cent to $206,995.
A Zillow executive pointed out how 2009 could usher in change for most of the U.S. Amy Bohutinsky, VP of communications, wrote: The first quarter — with a new administration, likely further foreclosure prevention efforts, and perhaps even lower mortgage rates — could be a bellwether for the rest of the year.