Try to wrap your mind around this thought: America’s housing market was hammered in 2008 to the point where when all is said and done on January 1, 2009, the losses should mean that more than two 
trillion dollars in housing value disappeared for the year. Due chiefly to declining home values nationally, which was reflected in an 8.4% loss for the first three quarters of the year, homeowners are now holding onto property that could be worth significantly less than it was a year earlier.
Not all markets are performing poorly, but the five biggest loss leaders are each located in California. According to an analysis of recent Zillow Real Estate Market Reports, Stockton, CA had the biggest single year over year drop of any market in the US, with home values dropping by 32.3% during that period. Also experiencing huge losses were Merced, Modesto, Salinas, and Vallejo-Fairfield, tallying losses average 30% for the year.
In the midst of the bad news there are a few markets which have actually seen a slight rise for 2008. These markets are State College PA , Anderson in South Carolina, and three North Carolina metropolitan areas including Burlington, Winston-Salem, and Jacksonville. Indeed, Jacksonville has led the way for the year, reflecting an average home increase of 4.9%.
“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.”
Zillow’s survey covers 163 metropolitan statistical areas (MSAs) across the USA. Most chilling is Zillow’s calculation that as many as 11.7 million American households owe more on their mortgages than their homes are worth. One in seven of all homeowners (14.3 percent) were “underwater” by the end of the third quarter with that number expected to increase significantly when fourth quarter figures are tallied early next year.
Source: Zillow.com
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