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Q3 Home Values Decline: Zillow

Third-quarter home values declined 9.7 percent from a year ago, marking the seventh straight quarter that home values have fallen, according to the Q3 2008 Zillow Real Estate Market Report.

Over the past year, nearly one-third of homes sold (30.2 percent) were sold for a loss, up from the 23.7 percent reported at the end of the second quarter. Nearly three-fourths (74 percent) of all U.S. homes lost value in the past year, Zillow says.

The survey also finds that one in seven households nationwide has negative equity. Of the homeowners who bought in the last five years, almost one-third (29.5 percent) are under water, owing more on the mortgage than the home is worth. Almost one in five transactions (18.6 percent) over the past year was a foreclosure.

Of the 163 metro areas surveyed, 27 showed negative value changes over the past five years and 12 other markets had flat returns over the same period. The markets hit hardest by long-term depreciation are Stockton, Calif., (3.8 percent), Detroit (3.1 percent), Boston (1 percent) and Cleveland (0.8 percent).

There are a few bright spots in the country:12 of the 163 markets had a year-over-year gain in value of more than 1 percent. Most of those areas were in the Carolinas and upstate New York — regions that did not experience the extreme appreciation seen during the real estate boom. Year-over-year home values rose 5.6 percent in Ithaca, N.Y. and 3.1 percent in Rochester, N.Y. while values rose 3.9 percent in Jacksonville, N.C. and 3.4 percent in Winston-Salem, N.C.

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