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Home Values Essentially Flat in Third Quarter, Rate of Depreciation Slows on Road to Housing Market Bottom

Nationally, Home Values Decline Year-over-Year; Negative Equity Remains High With More than One in Four Homeowners Underwater, According to Q3 2011 Zillow® Real Estate Market Reports

Nov 8, 2011

SEATTLE, Nov. 8, 2011 /PRNewswire/ -- Despite recent economic turmoil, home values in the United States remained almost unchanged from the second quarter to the third quarter of 2011, declining 0.2 percent, according to Zillow's third quarter Real Estate Market Reports(1). The Zillow Home Value Index(2) fell 4.4 percent year-over-year to $171,500. Home values have fallen 28.8 percent since they peaked in June 2006.

A lower rate of foreclosure liquidations(3) coupled with relatively flat home values caused negative equity to rise in the third quarter with 28.6 percent of single-family homeowners with mortgages underwater, compared to 26.8 percent in the second quarter. A homeowner is in negative equity when they owe more on their mortgage than their home is worth. While the pace of foreclosures has slowed, liquidations remained high in September, with 8.7 out of every 10,000 homes being liquidated.

Regionally, home values have weakened in the majority of the metropolitan statistical areas (MSAs) covered by Zillow, with 105 out of 157 markets declining from the second to the third quarter. Comparatively, 66 out of 157 markets declined between the first and second quarters of this year. Several markets, including Washington and Fort Myers, Fla., saw declines this quarter after two consecutive quarters in positive territory. However, there are signs of stabilization in some of the hardest hit markets in Michigan. Ann Arbor, Mich., Grand Rapids, Mich., Detroit, Mich., and Lansing, Mich., have all seen at least two quarters of appreciation.

"The peak summer home buying season is over for the year, with fewer home sales to show for it than one would expect based solely on the underlying fundamentals of price and financing costs. Home affordability is at historic lows courtesy of a large reset in home prices and continued low mortgage rates," said Zillow Chief Economist Dr. Stan Humphries. "We're clearly dealing with a crisis of confidence that is keeping potential buyers on the sidelines, fueled largely by high unemployment and more general economic uncertainty."

"That said, given the steady drumbeat of recent negative economic news, home values held up better than would be expected. We have been forecasting a housing bottom in 2012, at the earliest, and third quarter data further confirms this forecast."


Largest 25 Metropolitan Statistical Areas Covered by Zillow	Zillow Home Value Index
	Q3 2011	QoQ Change	YoY Change	Change From Peak	Negative Equity*
United States	$171,500	-0.2%	-4.4%	-28.8%	28.6%
New York	$348,400	-0.1%	-3.0%	-23.8%	17.5%
Los Angeles	$387,000	-0.7%	-5.9%	-36.0%	20.8%
Chicago	$169,900	-1.1%	-9.0%	-37.4%	46.2%
Dallas-Ft. Worth, Texas	$126,100	-1.0%	-3.3%	-12.6%	n/a
Philadelphia	$192,300	-0.4%	-4.1%	-18.5%	19.4%
Miami-Fort Lauderdale, Fla.	$138,200	-1.1%	-3.5%	-55.1%	46.7%
Washington	$313,400	-0.3%	-1.4%	-28.6%	26.7%
Atlanta	$118,900	-3.0%	-10.5%	-34.8%	58.7%
Detroit	$74,700	0.9%	-5.1%	-53.0%	33.1%
Boston	$319,100	0.5%	-1.3%	-19.9%	14.3%
San Francisco	$467,400	-1.7%	-7.5%	-33.8%	24.7%
Phoenix	$122,400	-1.1%	-7.6%	-56.6%	66.2%
Riverside, Calif.	$182,700	-1.5%	-5.0%	-54.6%	51.4%
Seattle	$257,000	-1.5%	-5.7%	-32.7%	36.1%
Minneapolis-St. Paul, Minn.	$158,700	-1.0%	-9.8%	-35.7%	n/a
San Diego	$344,000	-1.4%	-5.8%	-35.9%	25.8%
St. Louis	$130,500	-1.1%	-6.3%	-17.1%	29.7%
Tampa, Fla.	$105,000	-2.5%	-9.2%	-51.6%	56.5%
Baltimore	$221,200	-0.6%	-4.1%	-26.5%	28.8%
Denver	$197,300	0.3%	-3.5%	-15.0%	38.5%
Pittsburgh	$110,700	1.2%	3.2%	-0.7%	7.1%
Portland, Ore.	$209,000	-0.2%	-4.3%	-28.7%	32.3%
Cleveland	$111,200	-0.2%	-4.8%	-22.8%	41.5%
Sacramento, Calif.	$200,000	-1.9%	-11.2%	-51.8%	50.9%
Orlando, Fla.	$115,500	-1.9%	-5.8%	-55.3%	n/a
*Negative equity refers to the % of single-family homes with mortgages that are underwater.

The full national report, in its interactive format, will be available at www.zillow.com/local-info on Tuesday, Nov. 8. Additionally, in most areas data is available at the state, metro, county, city, ZIP code and neighborhood level.

Further analysis from Dr. Stan Humphries can be found on Zillow Real Estate Research, at http://www.zillow.com/blog/research/data/.

About Zillow, Inc.

Zillow is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its websites and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. More than 24.6 million unique users visited Zillow's websites and mobile applications in October 2011. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile, Postlets® and Diverse Solutions™. The company is headquartered in Seattle.

Zillow.com, Zillow, Zestimate and Postlets are registered trademarks of Zillow, Inc. Diverse Solutions is a trademark 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 157 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. The foreclosure liquidation rate measures the number of homes lost to the bank.

SOURCE Zillow, Inc.