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First Quarter Home Value Declines Match Worst of Housing Recession; Bottom Unlikely to Appear Before 2012

Home Values Show Sharpest Quarterly Decline Since 2008; Negative Equity Rises to 28.4% According to Q1 2011 Zillow® Real Estate Market Reports

Key facts:

- U.S. home values posted their largest quarter-over-quarter decline since Q42008, falling 3 percent. Home values have fallen 29.5 percent from their peak in June 2006.

- Negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in Q4 2010, due to accelerating home value declines.

- New data reveals bottom in home values unlikely to appear in 2011. Zillow has revised its forecast and now predicts a bottom in 2012 at the earliest.

SEATTLE, May 9, 2011 /PRNewswire/ -- Home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance, according to Zillow's first quarter Real Estate Market Reports(1). The Zillow Home Value Index(2) fell 3 percent from the fourth quarter of 2010 to the first quarter of 2011, and declined 8.2 percent year-over-year to $169,600. Home values have fallen 29.5 percent since they peaked in June 2006.

Negative equity reached a new high mark with 28.4 percent of single-family homeowners with mortgages underwater at the end of the first quarter, up from 27 percent in the fourth quarter of 2010. A homeowner is in negative equity when they owe more on their mortgage than their home is worth.

Meanwhile, foreclosures(3) rose throughout the first quarter as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the slew of moratoriums brought about by the "robo-signing" controversy. In March, one out of every 1,000 homes in the country was lost to foreclosure.

With substantial home value declines, as well as increasing negative equity and foreclosures, Zillow forecasts show it is unlikely that home values will reach a bottom in 2011. First quarter data has prompted Zillow to revise its forecast, now predicting a bottom in 2012, at the earliest.

"Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011," said Zillow Chief Economist Dr. Stan Humphries. "We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won't see a bottom in home values until 2012 or later."

Very few markets were exempt from home value declines in the first quarter. The vast majority (97 percent) of the 132 markets covered by Zillow logged home value declines. Only the Fort Myers, Fla., Champaign-Urbana, Ill. and Honolulu, Hawaii metropolitan statistical areas (MSAs) experienced quarterly increases, with home values rising 2.4 percent, 0.8 percent and 0.3 percent, respectively. Home values in the Sarasota, Fla. MSA remained flat.

Largest 25 Metropolitan Statistical Areas Covered by Zillow

Zillow Home Value Index


Q1 2011

QoQ Change

YoY Change

Change From Peak

Negative Equity*

United States

$169,600

-3.0%

-8.2%

-29.5%

28.4%

New York, N.Y.

$346,600

-1.6%

-5.3%

-24.2%

17.1%

Los Angeles, Calif.

$386,400

-3.0%

-7.6%

-36.1%

21.0%

Chicago, Ill.

$167,900

-4.8%

-13.8%

-38.1%

45.7%

Dallas, Tex.

$125,400

-1.2%

-6.9%

-13.2%

n/a

Philadelphia, Pa.

$187,600

-3.2%

-10.3%

-20.5%

22.1%

Miami-Fort Lauderdale, Fla.

$137,300

-1.8%

-12.8%

-55.4%

47.7%

Washington, D.C.

$305,900

-1.5%

-7.0%

-30.3%

29.5%

Atlanta, Ga.

$121,100

-4.4%

-17.3%

-33.7%

55.7%

Detroit, Mich.

$70,600

-5.2%

-17.3%

-55.5%

36.3%

Boston, Mass.

$305,800

-2.6%

-5.3%

-23.2%

16.9%

San Francisco, Calif.

$467,000

-3.8%

-10.2%

-33.9%

25.7%

Phoenix, Ariz.

$126,100

-2.3%

-11.2%

-55.3%

68.4%

Riverside, Calif.

$185,800

-1.8%

-3.2%

-53.8%

50.7%

Seattle, Wash.

$259,200

-1.7%

-11.7%

-32.1%

34.4%

Minneapolis-St. Paul, Minn.

$159,000

-4.8%

-15.1%

-35.6%

46.2%

San Diego, Calif.

$347,500

-2.1%

-5.5%

-35.3%

26.0%

St. Louis, Mo.

$127,900

-4.0%

-9.6%

-18.7%

31.2%

Tampa, Fla.

$107,200

-3.8%

-10.9%

-50.6%

59.8%

Baltimore, Md.

$218,300

-2.5%

-9.8%

-27.5%

29.6%

Denver, Colo.

$192,300

-2.7%

-9.6%

-17.2%

41.0%

Pittsburgh, Pa.

$105,800

-0.2%

-0.1%

-5.1%

6.8%

Portland, Ore.

$203,300

-3.0%

-12.1%

-30.6%

35.9%

Cleveland, Ohio

$108,500

-3.9%

-9.1%

-24.7%

41.4%

Sacramento, Calif.

$207,400

-4.2%

-11.0%

-50.1%

51.2%

Orlando, Fla.

$115,700

-2.9%

-7.8%

-55.2%

n/a

*Negative equity refers to the % of single-family homes with mortgages.



The full national report, in its interactive format, is available at www.zillow.com/local-info.  Additionally, in most areas data is available at the state, metro, county, city, ZIP and neighborhood level.

About Zillow, Inc.

Zillow is a real estate information marketplace providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace and Zillow Mobile. With 20 million unique users of its website and mobile applications during April 2011, Zillow's goal is to help people make intelligent decisions about homes in every stage of their lives -- home buying, selling, renting, remodeling and financing. The company is headquartered in Seattle.

Zillow.com, Zillow and Zestimateare registered trademarks of Zillow, Inc.

(1) The data in Zillow's Real Estate Market Reports is aggregated from public sources by a number of data providers for 132 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.

(2) 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.

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

SOURCE Zillow, Inc.


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