More than one in five homeowners underwater: Zillow

[Wednesdays]

Source: Yahoo News

NEW YORK (Reuters) – Home values in the United States extended their fall in the first quarter, with more than one in five homeowners now owing more on their mortgages than their homes are worth, real estate website Zillow.com said on Wednesday.

U.S. home values posted a year-over-year decline of 14.2 percent to a Zillow Home Value Index of $182,378, resulting in a total 21.8 percent drop since the market peaked in 2006, according to Zillow's first-quarter Real Estate Market Reports, which encompass 161 metropolitan areas and cover the value changes in all homes, not just homes that have recently sold.

U.S. homes lost $704 billion in value during the first quarter and have depreciated $3.8 trillion in the past 12 months, according to analysis of the reports.


Read more: http://news.yahoo.com/s/nm/20090506/ts_nm/us_usa_economy_housing

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(C&P’ed from SMW--credit goes to ozymandius for the original find)

[xchrom]

1. recommend

'U.S. homes lost $704 billion in value during the first quarter and have depreciated $3.8 trillion in the past 12 months, according to analysis of the reports.'

[Alcibiades]

2. my stepbrother is one of those

Sold his house in Cali, used the profits to buy a house for $900,000. Poured a whole bunch of money into the thing to increase its value. When the house was reappraised at $1,600,000, he then borrowed more against the higher value, putting much of that money back into the house, again in an effort to jack up the value.

Now he's upside down, and has stopped making payments because he thinks he will get a bailout. We hear a lot about folks who are poor, but little about people who are basically using their homes as a speculative asset.

Folks, if you want to make an improvement to your house because it will enhance the way you live, do it. Don't do it just because you plan on flipping your house. Maybe a house is an investment, but mainly it's a place to live, and exists to meet your needs.

[slackmaster]

3. Your stepbrother isn't the brightest bulb on the family Christmas tree

He sounds greedy and selfish.

[Alcibiades]

4. Yep

He's in sales. Nice enough guy to have a beer with, but pretty much a typical corporate asshole.

[CountAllVotes]

5. the house across the street ...

interesting situation with that place.

It was sold for $320,000.00 in 2005. The prior owner had lived there for a few years before his death and all of the houses around here sell or have been selling for abt. $250,000.00 these days.

Said house was worth a bit more for a short time and now and then dropped below $300,000 and now its value has suddenly spiked to about $340,000.00. :wtf: I don't know why because the owners were underwater on it up until very recently.

Makes me wonder how reliable zillow.com is. ?

:kick:

[Dappleganger]

7. zillow is often WAY off in their estimates...

the best indicator is data from recent sales from MLS reports.

[Dappleganger]

6. A house is not an ATM machine.

We're surrounded by neighbors who have used the equity in their home to purchase new cars, do home improvements (do they really HAVE to have a home theater??), pay for frivolous trips and send their kids to college. Now they are upside down in their homes and are either going to take a huge loss when they short sale or go through foreclosure. It sickens me that we have to pay for their GREED.

We are putting our own small home on the market (purchased in 2001, before the 'bubble') and we'll be lucky to walk away with enough to put down on another property of similar value. We never borrowed against it, opting instead to live with what we had except for putting in more tile and hardwood flooring, along with a few minor projects which we DIY'd. We've always driven used cars for at least 10 years. I do feel great empathy for people who were tricked into predatory lending notes and for those who were forced to borrow due to medical expenses--but it's really hard to stomach financing all of this greed from the top down.

[PassingFair]

8. It was not all greed.

I know a guy who paid $110,000 for his bungalow
in a neighborhood near me. Not an outrageous
sum 4 years ago....

The house 2 doors down from him just sold in
foreclosure for $12,000 ...it is nearly identical
to his.

He WILL walk away from his house and buy
another in the neighborhood ....

[Gormy Cuss]

10. It wasn't even mostly greed, but it's hard not to see that when you have neighbors take out equity.

A lot of not greedy people are being sucked underwater because of housing bubbles bursting. Two of my neighbors bought houses that they could afford at a time when the year-to-year values were increasing at 15-20%, but they bought them in the last year of the bubble. I'm sure that both are seriously underwater now. Neither has made big ticket renovations or seems to be living a lavish lifestyle. The only "greed" evident was buying a house at a time when they could afford it.

[superconnected]

26. In my area - Seattle, most of the people in trouble could afford their homes but

lost their jobs and couldn't find anything comparable salary wise.

The job issue here is the really big problem with the housing situation. The fact that a house goes down in value usually doesn't matter here, unless they're trying to sell.

[Lorien]

11. Before I clicked on your profile I thought "gotta be in Michigan"

sure enough. Ouch :-(.

[PassingFair]

12. Extreme suckage...

my Mother owns her house in Detroit (my brother
lived there until a year ago).

It appraised at $120,000 3 years ago, and now
she can't even sell it for $40,000.

She's pretty sanguine about it, considering
they paid $22,000 for it back in '71.

I could KICK my brother for leaving her in
the lurch....but he couldn't afford to buy
anywhere else until the marked started to
SUCK.

[Igel]

25. Ah, the much-ballyhooed era of new responsibility.

Not much like the old responsibility, but it can share the name. Get a loan, buy something with the money, and decide that since you don't like what you bought you don't owe the money anymore and, since you can, leave somebody else with your debt.

It's easier if you can paint those holding your debt as somehow inferior, not truly human.

[Psephos]

29. Sounds like the Chrysler deal...

...especially the part about painting the bondholders as subhuman for desiring their contractual rights be enforced.

Meanwhile, I notice that the multibillion dollar US government "loan" that kept Chrysler alive for a few months doesn't have to be repaid now. Which means, actually, that taxpayers will pay it.

I guess it could be argued that those taxpayers who will actually pay the bill haven't been born yet, so que sera, sera.

[Lorien]

9. Borrowing against your home's equity is not always about "greed"

I'm living on my home equity after losing my savings to health care costs that my insurance company wouldn't cover. I've been unemployed since December so I have no other choice-well, I suppose that I could use credit cards, but you can't write off the interest rates and the CC companies are too sneaky. Bravo to you for living without debt; hopefully you'll never find yourself in desperate times for any reason at all.

[PassingFair]

14. Living without debt will not shield anyone...

If I lose my job, we're sunk.

If I get sick, we're sunk.

I found this quote about the Depression:

"Reckless fools lost first because they
deserved to lose, and careful, wise men
lost later because a world-wide earthquake
doesn't ask for personal references."

--Edwin LeFevre

[Dappleganger]

15. Did you even read my last sentence?

At least read it all and don't read into it.

We are currently unemployed and NO STRANGER to desperate times. This is our THIRD LAYOFF--we have four kids and there is much at stake. But I am really surrounded by a lot of greedy people in MY NEIGHBORHOOD--I am not judging people as yourself (and if you read the last sentence you would know that).

[WriteDown]

16. Actually, that's fairly foolish....

If you charged up debt on credit cards, at least it could be discharged with bankruptcy. But using the equity in your house and taking out a secured loan negates that possibility.

[OhioChick]

13. K&R

:kick:

[unblock]

17. zillow's pricing algorithm is complete crap.

nevermind that any pricing algorithm is at best only as good as the data, and not all regions are even fully populated in zillow's database, and some that are are inaccurate. some of the data may also be stale, e.g., if someone has lived in a house a long time, and doesn't reflect changes to the house itself (upgrades, e.g.) unless the homeowner puts them in, hopefully honestly.

for instance, zillow has my old house in nj UP about 20% in the last year, despite the fact that comparables in the area are selling for less. and this was in a development, so the comparables are VERY comparable.

[Old Coot]

18. Zillow has my house valued at 61% over its market value. nt

[unblock]

23. sell! sell! sell!

[carlyhippy]

19. my home is probably worth more than I owe on it

never have taken out a home equity loan, got a locked in rate loan with low interest 7 years ago, will owe on the thing until past retirement, but hopefully before then will sell and make a little off of it.

I think the payments are high, but upthread the guy with the 900,000 dollar loan, good lord what would his monthly payments be? Probably more than I make in a month. I watch House Hunters on HGTV and the people are looking at 500,000-1 mil dollar homes, all I can say is they must make more money a month than I do, could never afford a mortgage that high.

[PassingFair]

20. I love to watch the "International House Hunters"...

I don't know why I do it to myself...

I'm like Wayne looking at the Stratocaster...

http://wayne.s.world.free.fr/Wayne/Sons/torturing.wav

"Stop torturing yourself, man!"

[carlyhippy]

28. LOL!~!! Someday when I win the lottery, I am going to be on international househunters

playing the "may I help you riff" in the house.....where "Stairway" will never be denied!
Wayne's world rocks LOL

[Vidar]

21. Not to mention many of us who can no longer afford our property taxes.

[sarcasmo]

22. Bank to home owners.

Fuck You we don't care how many mortgages we allow you take out on your house we want our money back.

[Yupster]

27. Funny thing about lenders

is how they expect to get their money back.

[Wednesdays]

24. Afternoon kick

:kick: