“Underwater” is such a gentle way of saying that a homeowner owes more than their homes are worth. “Underwater” is such a politically correct way of describing an experience that is more like drowning or being drowned.
Imagine you’re hosting a party at your house and all of your neighbors are there. Let’s say there are 10 different neighbors with you… three of them most likely are underwater/drowning. Maybe one of them is you.
As home prices continue to slowly slide, rates of homeowners with mortgages that are underwater has risen 23.2% from just a quarter ago to settle at 27% according to search site Zillow.com.
The same report discovered that more than a third of all homes were sold in December at a loss.
“While the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place,” said Dr. Stan Humphries, Zillow chief economist. “Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom. The housing recession is likely in its death throes, and we expect to see sales pick up in early 2011. That will lead the way to home values stabilizing and an eventual bottom later this year, although it will take several months of increased sales activity before values begin to respond.”
Methodology according to Zillow:
(1) The data in Zillow’s Real Estate Market Reports is aggregated from public sources by a number of data providers for 132 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) 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 a weighted average of the median home value for each county and includes data from 440 metropolitan statistical areas. It is expressed in dollars and is for a particular geographic region.
(3) Foreclosures are defined as a Trustee’s Deed Upon Sale or equivalent transaction.
AG is not affiliated with Zillow.com.