Americans Lose $1.4 Trillion in Home Values in Q4
By: Stan Humphries, Chief Economist | February 2, 2009
American homeowners collectively saw $3.3 trillion erased from the value of their real estate in 2008. What’s all the more stunning is that $1.4 trillion, 42 percent of the annual 2008 total, was lost in the fourth quarter alone, due largely to the fact that more markets fell into negative territory as the year progressed and those already in negative territory just got deeper.
These are just two of the literally thousands of data points found in Zillow’s Q4 2008 Real Estate Market Reports released today. Overall, as one might infer from just these two data points, the fourth quarter was another absolutely dismal quarter in terms of real estate market performance. Nationally, the Zillow Home Value Index was down 11.6 percent on a year-over-year basis to a value of $192,119. This marks the eight consecutive quarter of year-over-year depreciation and (again) the largest year-over-year decline in our data set, which extends back to 1996. While 20 percent (32) of the 161 markets we examined this quarter had positive year-over-year appreciation in the first quarter of 2008, only 9 percent (15) of markets were positive in the last quarter of 2008.
Some of the important implications of these real estate declines include:
• More than one-third (34.6 percent) of homes sold in 2008 were sold for a loss, up from 30.2 percent for the twelve months ending Q3 2008. While the $3.3 trillion in loss home value in 2008 can be considered akin to an unrealized loss in the stock market (i.e., people who don’t sell can wait for market values to rise again before selling, thus minimizing their particular loss), the loss for these one-third of homeowners is all too real.
• One in six (17.6 percent) of all homeowners is now underwater, more than the one in seven (14.3 percent) who were underwater in Q3. The Modesto and Vallejo, Calif., markets have the worst negative equity, with more than 80 percent of all homeowners there underwater.
• The higher rates of negative equity and increasing economic insecurity are combining to push foreclosure rates higher. One in five (19.9 percent) of all real estate transactions across the country in 2008 was a foreclosure. This was an increase from Q3, when 18.6 percent of all transactions were foreclosures.
• Unfortunately, the foreclosure numbers don’t even tell the whole story of the numbers of homeowners having to give up their homes, as 10.9 percent of all transactions in the United States in 2008 were short sales, or homes sales where the lender agreed to a home price less than the amount owed on the mortgage in order to avoid the cost and time of a foreclosure.
As usual, one should dive down into the individual metropolitan level reports to get a better idea of what’s happening on a local level. Doing so with the New York metro report, you’ll find that Manhattan is now posting a negative year-over-year change in home values compared with the 1 percent increase reported last quarter (no small wonder considering all of the job losses in the financial sector) and the tech centers in the Bay Area that had been maintaining some slight positive appreciation in home values in recent quarters (Cupertino, Palo Alto, Mountain View, Sunnyvale) have now slipped into negative year-over-year territory (-7.0%, -0.6%, -4.9% and -7.0% respectively).
- Stumble it!
- Categories: Real Estate Analytics, Real Estate Industry
Comments
19 Comments so far
Enjoy this post? Subscribe to the Zillow Blog feed or get updates via e-mail
el precio de las viviendas de los americanos pierde 3,3 billones de su valor en 2008 — idealista news on February 3, 2009 5:32 am
[...] señala el vicepresidente de zillow.com, stan humphries artículo visto en zillow.comAmericans Lose $1.4 Trillion in Home Values in Q4añadir tu comentario ver comentarios ¿te ha parecido [...]
Brandon on February 3, 2009 8:29 am
Wow–that’s a lot of money!
Tony Sena on February 3, 2009 11:12 am
I think a few of my dollars are in that figure!
Zillow: 27% of St. Louis-area home sales in 2008 were for a loss | Building Blocks | STLtoday on February 3, 2009 11:20 am
[...] a link to discussion of Zillow’s national figures, and a webpage where you can find St. Louis-area data (though be aware: Some real estate experts [...]
Eric Mangan on February 3, 2009 1:13 pm
Zillow…thanks for putting out this very useful data. I’ve got some tips to help today’s home sellers compete against foreclosed sales & short sales.
c13 on February 3, 2009 3:36 pm
something is not correct here. how is 1/6 greater than 1/5th? i’m guessing a simple typo or reversal of the statistic
“One in six (17.6 percent) of all homeowners is now underwater, more than the one in five who were underwater in Q3.”
Amy B (from Zillow) on February 3, 2009 4:39 pm
c13 - you caught a typo, thank you. Should read:
“One in six (17.6 percent) of all homeowners is now underwater, more than the one in SEVEN who were underwater in Q3.”
Updating now.
Stan Humphries on February 3, 2009 4:42 pm
@c13: Thanks for the catch. Typing too fast I suppose. Correct number for Q3 is 1/7 (14.3%) of homes underwater. We’ll correct the text shortly and thanks for pointing out.
Jose Lopez on February 3, 2009 8:45 pm
There is more to come you watch. The deals out there are incredible right now! Wow, what a great market!!!
Jose Lopez
Sarasota Florida Foreclosures
Bill K on February 4, 2009 9:32 am
Great information. But I am curious on the source of your information on the number of foreclosed properties and short sales in various markets. How are you determining these figures? Are you looking at deed type, seller name, etc?
Great work and a tip of the hat to you and your staff.
Holy January! Buyers are lurking… | Zillow® Blog on February 4, 2009 12:05 pm
[...] Good Morning America ran a story on buyers who are swooping in to view and snatch up bargains amid record-low home values. This Michigan listing on Zillow, featured on the show, has attracted nearly 14,000 page views [...]
Zillow Turns 3! | Zillow® Blog on February 8, 2009 7:01 am
[...] forward three years and things couldn’t be better. OK, the housing market and economy could be better, but in terms of Zillow’s traffic and viewership, we are tickled. January’s 7.5 million [...]
In Many Markets, Short Sales are 1 in 10 of All Transactions | Zillow® Blog on February 13, 2009 2:29 pm
[...] information on short sales can be found here, and in our Q4 Real Estate Market Reports [...]
Fargo, ND, Thriving in Tough Economy | Zillow® Blog on February 26, 2009 12:39 pm
[...] a Zillow Home Value Index of $152,000, which is an increase of 2.4% year-over-year compared to the rest of the nation that dropped 11.6% in Q4 year-over-year. See Zillow Real Estate Market Reports for your [...]
Prince William Homes on March 1, 2009 7:30 pm
It will be interesting how the new numbers of a deteriorating economy will factor into this equation! High unemployment, a major drop in the stock indexes and plummetting home values that have frozen lending fromm almost all institutions! Alt-A’s and commercial resets are just ahead! Stay tuned!
Shelley Bassett on March 28, 2009 12:45 pm
We bought our house in Nov.2005 for 185,000.We live in McHenry County,IL.at 1810 Orchard Lane,Mchenry,IL 60050.Our home like so many others has droped in value,down to 159,000 to maybe 181,000.How come are taxes go up almost $800.more seems like everyyear.This year was the worst tax rise almost $800 Dollars.When the vaule of our home declined about 10,000?Talk about buyer beware and Lying sellers.After afew months of living here we were horified to discover that during heavy rains are house Flash Floods!Luckly the water fills up gargage,but there have been a few times it flooded so high that it saturated are basement ruined new carpeting we had just put in 3 weeks prior,thinking that we would turn it into a finished basement!Any advice how we could lower are Taxes?
Thankyou just another victim,of Dishonest ,lying people.
buzzup.com on April 2, 2009 3:26 am
Americans Lose $1.4 Trillion in Home Values in Q4…
American homeowners collectively saw $3.3 trillion erased from the value of their real estate in 2008….
Jim Duncan on WINA radio discussing Charlottesville and Central Virginia real estate market | Real Central VA on April 20, 2009 4:32 am
[...] a Realtor - an awesome post by one of my buyer clients. - A plug or two for Nest Realty Group. - The referenced Zillow study about under water homeowners. - Sellers need to check the MLS and check up on their Realtor representation … - A good [...]
RP: 10 Best Things The Recession Killed - Real Estate Investing on August 27, 2009 12:45 pm
[...] now that pretty much all real estate across the country has lost nearly a third of its value over the last two years, some of us can go back to fantasizing about someday actually [...]