Home Values Continued Decline in Fourth Quarter

Nationwide home values continued to decline in the fourth quarter of 2007, falling 3.5 percent from the third quarter and 3 percent year-over-year to a U.S. Zindex home value indicator of $224,890, according to Zillow’s Q4 2007 Home Value Report.
The Zindex is the median valuation and measures the value of all homes in an area, not just those that have sold during the quarter.
In 2007, condominiums posted the largest year-over-year drop, down 7.4 percent to a Zindex of $229,017 while single-family residences fell 5.5 percent to a Zindex of $230,908. On a quarter-over-quarter basis, the decline in value of single-family residences outpaced the decline of condominiums, falling 4.4 percent and 4 percent respectively.
The continued decline in home values means many U.S. homeowners saw equity slip away while more homeowners were pushed into negative equity situations, meaning they owe more on their mortgage than the home is currently worth. Nationwide, those at most risk of being underwater on their mortgage are those who bought in the last two years when most markets peaked.
Of those who bought in 2006, 39 percent now have negative home equity as do 30 percent of those who purchased in 2007.

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