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2008-12-16 00:16:43

Home Equity Stripped Away in 2008


SEATTLE – Dec. 15, 2008 —U.S. homes are set to lose well over $2 trillion in value during 2008, according to analysis of recent Zillow Real Estate Market Reports1. Home values declined 8.4 percent year-over-year during the first three quarters of this year, compared to the same period in 2007.
“Underwater” was the real estate buzzword of the year. U.S. home values2 lost $1.9 trillion from the first of the year through the end of the third quarter, and were likely to fall further in the fourth quarter, leaving approximately 11.7 million American households owing more on their mortgage than their homes are worth. One in seven of all homeowners (14.3 percent) were underwater by the end of the third quarter.
 “This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets – particularly those hit hardest in the downturn – showed smaller year-over-year declines than in the prior quarter. Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market.”
Thirty of the 163 metropolitan statistical areas (MSAs) covered in the Zillow Real Estate Market Reports showed gains in the Zillow Home Value Index3, or median value of all homes in the area, over the first three quarters of the year, with the Jacksonville, N.C. region seeing year-over-year appreciation of 4.9 percent. The change in value was calculated by averaging the year-over-year change in each of the first three quarters of the year.
Also performing well were the Winston-Salem, N.C. and Anderson, S.C. MSAs, with year-over-year increases of 4.1 percent and 3.5 percent, respectively, over the first three quarters of the year.
The Stockton, Calif. region fared the worst in the first three quarters of 2008, with home values sliding 32.3 percent year-over-year. The Merced, Calif. area followed with home values declining 31.2 percent year-over-year in the first three quarters of 2008.
MSAs with Best-Performing Housing Markets of 2008

%Change: Q1-Q3 2008 from Q1-Q3 20074
Zillow Home Value Index Q3
Annualized Five-year change in value (Q3)
Jacksonville, N.C.
Winston-Salem, N.C.
Anderson, S.C.
State College, Penn.
Burlington, N.C.

MSAs with Worst-Performing Housing Markets of 2008

%Change: Q1-Q3 2008 from Q1-Q3 20074
Zillow Home Value Index Q3
Annualized Five-year change in value (Q3)
Stockton, Calif.
Merced, Calif.
Modesto, Calif.
Salinas, Calif.
Vallejo-Fairfield, Calif.

About® is an online real estate community where homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes, for free. Launched in early 2006 with Zestimate® values and data on millions of U.S. homes, Zillow has since opened the site to community input, data and dialogue. One of the most-visited U.S. real estate Web sites, Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process-- buying, selling, remodeling and financing. In addition to the flagship, Zillow also operates Zillow Mortgage Marketplace (, an online mortgage resource allowing borrowers to anonymously request an unlimited number of personalized loan quotes from confirmed mortgage professionals, for free. Zillow is headquartered in Seattle and has raised $87 million in funding., Zillow, and Zestimate are 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 163 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 Total home values are calculated as the sum of all Zestimates for a given day. Zestimates are estimated values of individual homes, calculated with a proprietary formula.
3 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 the median home value for each county and is weighted by population. It is expressed in dollars.
4 Year-over-year home value changes are the average of the year-over-year changes in Zillow Home Value Index for each market for the first three quarters of the year.
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Whitney Tyner
Public Relations
P (206) 757-2718
F (206) 470-7001
999 Third Avenue
Seattle, WA 98104

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