Negative Equity Falls in Second Quarter, But National Home Values Continue to Decline

/PRNewswire/ -- Home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index(1) falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines, and negative equity(2) fell to 21.5 percent, according to the second quarter Zillow Real Estate Market Reports(3).

Negative equity, which refers to the percentage of single-family homeowners with mortgages who are underwater, fell from 23.3 percent in the first quarter, and from 23 percent one year ago.

Conditions varied among individual markets across the country. In California, where both federal and state tax credits are available to some homebuyers, more than a quarter (27.8 percent) of markets tracked by Zillow saw increases in home values in the past year. Home values in five California markets have increased for the past five quarters, and four of those have increased by more than 5 percent since the second quarter of 2009. The Zillow Home Value Index was up 7.3 percent year-over-year in the San Diego metropolitan statistical area (MSA); up 5.9 percent in the San Francisco MSA; up 5.6 percent in the San Jose MSA; and up 5.5 percent in the Los Angeles MSA.

Meanwhile, home values in Florida and Arizona continued to show dramatic declines, with home values in the Miami-Fort Lauderdale MSA falling 15.2 percent year-over-year and home values in the Phoenix MSA falling 11.8 percent.

"As the national housing market limps toward stabilization, individual markets are a mixed bag," said Zillow Chief Economist Dr. Stan Humphries. "The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid - and likely unsustainable - rates of appreciation in many markets across the state. While there is some uncertainty about how home values will respond in those markets once all incentives are removed, it's certain they can't continue at their current rates of appreciation, but is unlikely they will re-test the low points reached in 2009.

"Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona.

"Nationally, home values are moving in the right direction as rates of decline continue to slow. There is a large unknown on the horizon, however, as these second quarter numbers are still heavily influenced by the federal homebuyer tax credits, which were available for homes under contract by the end of April. Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already-declining home values is yet to be seen. Recent trends in home values suggest the nation could reach a bottom in the latter half of 2010, but we continue to be cautious about the impact of declining home sales."

Foreclosures(4) again reached a new peak in June, with more than one out of every 1,000 (0.11 percent) U.S. homes being foreclosed upon during the month.

Foreclosure re-sales(5) fell in June, making up 16.9 percent of all U.S. home sales during the month, down from a 2010 high of 19.8 percent in February. Foreclosure re-sales continued to be high in most markets hit hardest by value declines. For example, they made up 55.8 percent of June sales in the El Centro, Calif. MSA, 54.6 percent in the Madera, Calif. MSA and 53.6 percent in the Merced, Calif. MSA. Additionally, more than one-fourth (26 percent) of home sales nationwide sold for less than what the seller originally paid.

Metropolitan
        Statistical                Zillow Home Value Index
                                Areas
                                -----
                            June       QoQ       YoY     Change   Negative
                              2010   Change    Change     from    Equity*
                                                 ------     Peak      ----
                                                            ----
  United States           $182,460      -0.6%     -3.2%    -23.9%     21.5%
  Akron, OH               $117,213       0.4%     -2.7%    -14.1%     26.1%
  Albany, NY              $188,323       1.5%     -1.1%     -5.8%     10.7%
  Allentown, PA           $191,234      -0.3%     -1.7%    -16.0%     16.8%
  Anderson, SC             $99,300       1.5%      2.4%     -9.6%      n/a
  Ann Arbor, MI           $157,432      -1.2%    -10.6%    -32.2%     33.0%
  Atlanta, GA             $142,461      -1.9%     -6.0%    -22.2%     31.5%
  Atlantic City, NJ       $200,906      -0.3%     -5.0%    -27.2%     20.2%
  Augusta, GA             $107,414       1.1%     -6.4%     -8.3%     14.5%
  Bakersfield, CA         $136,554       1.9%     -1.4%    -50.5%     44.6%
  Baltimore, MD           $238,527      -1.1%     -5.1%    -19.2%     19.0%
  Bellingham, WA          $255,500       0.6%     -1.3%    -10.1%      n/a
  Bend, OR                $167,531      -2.7%    -21.8%    -52.6%     40.3%
  Boston, MA              $331,568       3.2%      3.4%    -16.8%      8.3%
  Boulder, CO             $312,583       2.1%     -0.4%     -1.9%      9.9%
  Bremerton, WA           $249,020      -1.0%     -4.3%    -19.0%     18.6%
  Canton, OH              $102,763      -0.2%     -1.7%    -13.6%     23.6%
  Cape Cod, MA            $318,026       0.4%     -2.8%    -22.7%      6.9%
  Champaign-Urbana, IL    $131,512       0.7%     -2.2%     -3.9%     11.1%
  Charleston, SC          $170,039       0.0%     -5.1%    -15.7%     22.0%
  Charlotte, NC           $148,985       0.1%     -4.0%    -10.4%     27.3%
  Chattanooga, TN         $126,967      -2.6%     -2.1%     -4.7%      n/a
  Chicago, IL             $196,987       1.6%     -4.4%    -27.2%     28.9%
  Chico, CA               $203,749       2.9%     -0.4%    -32.1%     24.7%
  Cleveland, OH           $119,716       1.5%     -1.3%    -16.4%     28.8%
  Cleveland, TN           $123,000       2.8%      0.5%     -6.0%      n/a
  Colorado Springs, CO    $189,793      -0.0%     -2.0%     -7.4%     28.4%
  Columbia, SC            $122,065       0.0%     -2.1%     -5.7%     17.3%
  Columbus, OH            $137,578      -0.3%     -2.8%     -8.4%     26.4%
  Corvallis, OR           $244,300       0.8%     -4.4%     -9.6%      n/a
  Cumberland, MD           $83,500      3.57%     2.10%      0.0%      n/a
  Dayton, OH              $102,713      -0.2%     -3.1%    -12.9%     22.6%
  Daytona Beach, FL       $108,300      -1.7%    -12.8%    -51.4%      n/a
  Denver, CO              $215,969       1.0%      2.5%     -7.4%     29.1%
  Des Moines, IA          $144,550       2.3%     -0.1%     -2.8%     18.6%
  Destin, FL              $159,290       0.3%     -3.8%    -37.3%     37.8%
  Detroit, MI              $87,147      -1.6%    -14.3%    -46.0%     31.4%
  Durham, NC              $180,886       2.3%      3.6%      0.0%      8.4%
  El Centro, CA           $112,086      -2.2%    -11.3%    -56.3%     57.5%
  Eugene, OR              $193,793      -1.8%     -6.3%    -16.8%     12.8%
  Fayetteville, NC        $114,036      -0.7%     -7.0%     -7.0%     11.5%
  Flagstaff, AZ           $254,385      -3.4%     -9.8%    -29.5%     19.9%
  Fort Collins, CO        $219,522       1.2%      1.2%     -3.1%     13.0%
  Fort Myers, FL          $120,479      -0.1%     -6.5%    -60.2%     51.9%
  Fresno, CA              $153,117      -0.4%     -4.7%    -47.8%     38.5%
  Gainesville, FL         $146,253       1.8%     -7.8%    -23.2%     22.6%
  Grand Junction, CO      $177,344      -4.2%    -12.6%    -20.8%     31.2%
  Grand Rapids, MI        $116,111      -0.6%     -0.4%    -18.3%     33.0%
  Green Bay, WI           $142,896       0.2%     -0.7%     -5.2%     15.7%
  Greensboro, NC          $125,125      -0.4%     -5.3%    -12.1%     11.7%
  Greenville, SC          $132,853       2.3%     -0.4%     -1.8%     11.6%
  Hanford, CA             $118,400       1.1%    -14.7%    -45.4%      n/a
  Hartford, CT            $224,393       2.2%      1.4%     -9.9%      8.3%
  Jackson, TN              $95,800       2.1%      0.7%     -3.4%      n/a
  Jacksonville, FL        $136,265      -3.2%    -10.7%    -34.6%     49.8%
  Jacksonville, NC        $140,700      -0.4%      0.5%     -0.5%      n/a
  Johnson City, TN        $110,100       2.6%     -3.6%    -14.3%      n/a
  Knoxville, TN           $134,741       1.7%     -4.4%     -6.3%      9.4%
  Lakeland, FL             $99,695      -5.3%    -13.9%    -47.1%     55.7%
  Lancaster, PA           $178,064       1.1%     -3.2%     -7.2%      8.0%
  Las Vegas, NV           $128,183      -0.4%    -12.4%    -58.1%     73.9%
  Lincoln, NE             $134,914      -0.4%     -0.1%     -5.5%     12.7%
  Little Rock, AR         $128,012       4.0%      4.4%      0.0%      9.6%
  Los Angeles, CA         $425,425       2.2%      5.5%    -29.7%     16.9%
  Madera, CA              $151,759       7.8%     -0.5%    -51.6%     38.4%
  Madison, WI             $203,332      -0.7%     -3.6%    -14.8%     12.2%
  Medford, OR             $179,433      -0.5%     -7.7%    -37.9%     37.4%
  Melbourne, FL           $112,654      -4.5%     -9.6%    -51.6%     43.0%
  Memphis, TN             $105,058      -0.7%     -4.2%    -14.3%     33.7%
  Merced, CA              $110,719       1.2%      1.4%    -67.9%     40.0%
  Miami-Fort
   Lauderdale, FL         $146,458      -6.6%    -15.2%    -52.4%     44.0%
  Milwaukee, WI           $178,517       1.9%     -6.0%    -13.0%     22.0%
  Minneapolis-St Paul,
   MN                     $185,783      -0.2%     -3.1%    -24.3%     36.6%
  Mobile, AL              $105,480      -4.1%    -11.7%    -20.2%     13.3%
  Modesto, CA             $146,391       2.2%      0.4%    -60.0%     57.5%
  Morristown, TN           $98,700       0.8%     -6.6%    -20.7%      n/a
  Mount Vernon, WA        $211,100      -2.7%    -13.4%    -23.4%      n/a
  Napa, CA                $360,562       0.9%     -5.1%    -41.1%     37.2%
  Naples, FL              $216,628       0.5%     -3.7%    -52.0%     38.5%
  Nashville, TN           $150,378      -1.6%     -6.2%     -9.6%     18.1%
  New Haven, CT           $231,106       2.1%      0.5%    -15.9%     10.5%
  New London, CT          $225,420       2.2%      1.8%    -13.1%     10.6%
  New York, NY            $363,239      -0.5%     -2.1%    -20.9%     13.5%
  Ocala, FL               $101,072      -4.1%    -15.2%    -42.8%     37.7%
  Oklahoma City, OK       $119,257       4.6%      5.0%      0.0%      6.1%
  Olympia, WA             $232,744       0.2%     -4.2%    -10.8%     20.8%
  Omaha, NE               $139,666      -4.8%     -7.0%     -8.2%     13.6%
  Orlando, FL             $124,483      -1.3%    -13.8%    -51.7%     64.6%
  Panama City, FL         $150,500      -0.3%     -4.9%    -42.5%     31.1%
  Pensacola, FL           $123,252      -2.2%     -3.7%    -24.5%     32.1%
  Philadelphia, PA        $208,639      -0.3%      0.0%    -11.0%     10.6%
  Phoenix, AZ             $137,113      -3.6%    -11.8%    -51.1%     66.8%
  Pittsburgh, PA          $107,164       1.1%     -2.8%     -5.1%      5.6%
  Pittsfield, MA          $194,900       2.5%      1.7%    -11.2%      n/a
  Port St. Lucie, FL      $111,812      -4.9%     -9.7%    -55.9%     55.0%
  Portland, OR            $230,165      -0.9%     -7.1%    -22.3%     22.6%
  Poughkeepsie, NY        $232,640      -2.2%     -8.6%    -26.1%     12.5%
  Prescott, AZ            $189,774      -1.7%     -6.7%    -38.6%     28.2%
  Providence, RI          $219,102      -1.2%     -4.3%    -28.0%      n/a
  Pueblo, CO              $108,010      -1.1%     -1.7%    -13.0%     29.3%
  Punta Gorda, FL         $121,989      -1.4%      1.4%    -48.2%     38.3%
  Raleigh, NC             $182,578       0.0%     -6.8%    -11.8%     20.1%
  Reading, PA             $163,441       0.9%      0.7%     -9.0%      9.4%
  Reno, NV                $181,576      -1.1%     -9.0%    -49.4%     61.9%
  Richmond, VA            $200,111       1.6%     -2.5%    -11.4%     17.4%
  Riverside, CA           $194,562       1.5%     -0.8%    -51.7%     49.0%
  Rochester, NY           $123,158       2.1%      2.8%      0.0%      9.3%
  Rockford, IL            $109,214       1.2%     -2.1%    -11.6%     16.3%
  Sacramento, CA          $234,655       1.0%     -2.0%    -43.2%     38.1%
  Salem, OR               $178,122       0.8%     -4.5%    -16.2%     20.4%
  Salinas, CA             $303,697      -0.1%      0.6%    -56.0%     33.6%
  Salisbury, MD           $143,900      -3.2%     -9.8%    -21.1%      n/a
  San Diego, CA           $378,798       2.9%      7.3%    -29.7%     20.4%
  San Francisco, CA       $528,861       2.0%      5.9%    -25.1%     19.6%
  San Jose, CA            $590,686       3.2%      5.6%    -20.7%     13.8%
  San Luis Obispo, CA     $400,845      -0.8%     -4.0%    -33.3%     17.7%
  Santa Barbara, CA       $449,368       1.0%      4.2%    -33.1%     22.9%
  Santa Cruz, CA          $507,115      -0.3%     -4.1%    -30.6%     16.9%
  Santa Rosa, CA          $374,313       3.6%      1.9%    -36.8%     15.8%
  Sarasota, FL            $150,175      -0.6%     -4.4%    -51.2%     45.4%
  Seattle, WA             $288,942      -1.3%     -5.9%    -24.3%     25.0%
  Spartanburg, SC         $105,521       0.6%     -2.7%     -2.9%     12.7%
  Spokane, WA             $158,933       1.4%     -2.6%    -15.5%     20.0%
  Springfield, OH          $91,800     -1.59%    -3.52%    -10.6%      n/a
  Springfield, MA         $190,256       0.7%     -2.3%    -12.0%      7.2%
  St. Louis, MO           $141,073       1.6%     -3.3%    -10.5%     18.3%
  Stamford, CT            $393,151       1.6%     -0.2%    -21.1%      9.6%
  Stockton, CA            $163,039       2.6%     -0.3%    -60.3%     53.5%
  Sumter, SC              $100,500       1.9%     -1.7%    -14.2%      n/a
  Tallahassee, FL         $149,118      -3.4%     -7.2%    -18.3%     32.9%
  Tampa, FL               $118,670      -0.1%     -8.2%    -45.1%     45.3%
  Toledo, OH               $93,489      -0.3%     -4.7%    -23.2%     26.5%
  Tucson, AZ              $160,341      -0.5%     -6.4%    -31.7%     41.4%
  Tulsa, OK               $117,135       0.9%      2.6%      0.0%      6.1%
  Utica, NY                $99,710       2.8%      1.7%     -5.0%      8.4%
  Vallejo, CA             $217,225       3.9%     -2.6%    -54.1%     49.7%
  Ventura, CA             $418,875       1.2%      3.7%    -33.3%     18.9%
  Vero Beach, FL          $121,439      -1.1%     -8.5%    -48.6%     42.5%
  Visalia, CA             $136,442      -1.7%     -6.7%    -44.1%     37.5%
  Washington, DC          $330,573       1.0%      1.8%    -24.2%     25.0%
  Winston-Salem, NC       $134,546       2.4%      1.6%     -2.9%     10.1%
  Worcester, MA           $214,437       1.2%     -0.8%    -24.6%     20.2%
  Yakima, WA              $137,586      -0.3%     -2.3%     -3.7%      7.2%
  York, PA                $154,688      -0.3%     -2.6%    -13.5%     15.1%
  Yuba City, CA           $153,200       1.4%     -5.2%    -51.3%      n/a
  Yuma, AZ                $124,500      -1.0%    -10.3%    -33.2%      n/a
  --------                --------      ----     -----     -----       ---
  *Negative equity refers to the percent of single-family
   homeowners with mortgages
  -------------------------------------------------------

(1) The Zillow Home Value Index is the median Zestimate valuation for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. The Home Value Index at the national level is calculated using a weighted average of the median home value for each county and includes data from 440 metropolitan statistical areas. It is expressed in dollars and is for a particular geographic region.

(2) Negative equity is calculated of all single-family homes with mortgages. Zillow began calculating negative equity with this methodology in the first quarter of 2009.

(3) The data in Zillow's Real Estate Market Reports is aggregated from public sources by a number of data providers for 124 Metropolitan Statistical Areas dating back to 1996. Mortgage and home loan data is typically recorded in each county and publicly available through a county recorder's office.

(4) Foreclosures are defined as a Trustee's Deed Upon Sale or equivalent transaction.

(5) Foreclosure re-sales capture mostly sales of bank-owned (REO) homes. It measures sales of homes that were foreclosed on in the previous 12 months.
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How To Save Your Home From Foreclosure

(StatePoint) America's foreclosure crisis continues to hit home among families nationwide.

Approximately one million properties now are in some stage of foreclosure and a million more are in danger of joining them, say industry experts.

To put things in perspective, one in every 464 U.S. households received a foreclosure notice during a recent month, according to RealtyTrac Inc., a national database of foreclosure properties. And if conditions don't improve dramatically, that number will rise to one in every 33 households over the next two years, according to a report by The Pew Charitable Trust.

"What it all comes down to is if families are going to save their homes, they'll have to do it themselves," says Lloyd Segal, author of the new book, "Stop Foreclosure Now: The Complete Guide to Saving Your Home and Your Credit" (AMACOM).

There are several keys to save your home from foreclosure, according to Segal.

Move Fast To Deal With Your Lender:

Many wait until days before a foreclosure sale by their lender, at which point there's not much to be done.

"The most important thing when you fall behind on mortgage payments and you know you can't keep up, is to contact your lender," stresses Segal.

Call your lender and speak with the loan modification or foreclosure department. Speak with somebody in a position of authority.

Ask about modifying your loan. There are different types of modifications, including moving debt to the end of the loan's life or lowering your interest rate and payments temporarily until you can get back on track.

"You've already broken your promise, so be honest about your predicament: Did you lose your job, get divorced or have an illness? If you say it's only going to take a short period to get back on track with payments and it'll take longer, you're only hurting yourself," he says.

Is Your Home Worth Saving?

Determine if you have any equity in your house or an overwhelming emotional attachment to it.

"Equity" refers to the market value of your property less the balance owed on liens against it and the costs of sale. If you have equity, it is economically worth saving. Be sure you correctly value your home, taking into account any declining local property values.

If you have no equity but an emotional commitment, you still may wish to save your home. If you have no equity or emotional attachment, consider selling as an alternative to foreclosure.

Refinance Before Foreclosure Hits:

Refinancing consists of obtaining a loan from a new lender to pay your existing lender. You can do this to pay off your foreclosure lender entirely or simply bring your loan current.

If your credit is good or you have equity in your property you should be able to refinance, even if foreclosure proceedings already have begun.

After foreclosure has begun, refinancing lenders will demand higher interest rates and charge fees for the loan.

Other Ways To Stop Foreclosure:

Active military personnel and their families (and anyone who co-signed a loan with them) are protected from foreclosure, allowing for temporary suspension of collection actions. You can even get a property back if it was sold or reduce your current loan rate.

For its part, bankruptcy will put an immediate halt on foreclosure, but usually only for a temporary period. Moreover, bankruptcy will harm your credit for the future.

If the foreclosure itself is defective, you might be able to get it halted. In most cases, you will have to consult an attorney to see if the loan violated any laws or if the lender made a mistake in the foreclosure process - such as filing papers incorrectly or not giving you the required time before next steps.

For more tips, read Segal's new book, "Stop Foreclosure Now."

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