Ouch One Third of New Owners Owe More Than House Is Worth - Mercedes-Benz Forum

 
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post #1 of 4 (permalink) Old 08-12-2008, 09:36 AM Thread Starter
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Ouch One Third of New Owners Owe More Than House Is Worth

One Third of New Owners Owe More Than House Is Worth

Aug. 12 (Bloomberg) -- Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said. That contributes to the foreclosure rate because some homeowners can't absorb the loss and end up surrendering their homes to the bank that holds the mortgage, said Stan Humphries, Zillow's vice president of data and analytics.

``For homeowners who need to sell, this is a gravely serious situation,'' Humphries said in an interview. ``It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.''

The highest percentages of homeowners with negative equity were located in California. In four of the state's metropolitan areas -- Stockton, Modesto, Merced and Vallejo-Fairfield -- the number of homeowners whose mortgage debts exceeded the values of their properties topped 90 percent, Zillow said.

In five more California areas -- the Inland Empire (Riverside-San Bernardino), Bakersfield, Yuba City, El Centro and Madera -- the percentages were more than 80 percent.

Foreclosure Sales

In Stockton and Modesto, more than half the sales in the second quarter were of foreclosed homes, Zillow said. Almost 15 percent of sales nationwide were foreclosures, the company said.

Prices fell on a year-over-year basis in 140 out of 165 markets, Zillow said. Pittsburgh, Oklahoma City and Austin, Texas, were among the markets that saw rising home values, the company said.

The 9.9 percent decline in home values was the largest on a year-over-year basis in at least 12 years, Zillow said. The median home price of $206,919 was the lowest since the fourth quarter of 2004, the company said.

``Sellers are starting to adjust their expectations,'' Zillow Chief Financial Officer Spencer Rascoff said in a Bloomberg TV interview. ``More sellers accepting a loss is actually a sign of optimism. It means that the transactions might start happening. There are so many sales contingent upon the buyer selling their home.''

The Zillow Home Value Index is the median 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 company said. The index at the national and metropolitan area levels is calculated using a weighted average of the median home value for each county, Zillow said.

Bloomberg.com: Worldwide
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post #2 of 4 (permalink) Old 08-12-2008, 09:41 AM
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Yes, everyone got fucked:

USATODAY.com - Bush seeks to increase minority homeownership

Fact Sheet: America's Ownership Society: Expanding Opportunities

Bush should continue efforts to increase homeownership | Michigan Chronicle | Find Articles at BNET

Bush Administration Highlights Private-Public Partnership to Increase Minority Homeownership | Article from Asian Pages | HighBeam Research

President Hosts Conference on Minority Homeownership

Bush speaks on increasing homeownership, Martinez holds Spanish-language town hall.

Fucked on real estate, fucked on oil, some people even got fucked out of their own kids, blown up in Iraq. This entire nation is looking for Preparation H.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #3 of 4 (permalink) Old 08-12-2008, 09:43 AM
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The housing piramid is colapsing.
Working class will pay the bill.
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post #4 of 4 (permalink) Old 08-12-2008, 10:40 AM
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Its nothing new

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Originally Posted by AndreiRN View Post
The housing piramid is colapsing.
Working class will pay the bill.
Its happening in china too and its big time

ERIC.

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