Nearly One-Third of All Homeowners Who Purchased in Past 5-yrs Underwater…Best Case

Zillow just reported that according to new data, that nearly one-third of all US homeowners who bought in the past 5-years are in a negative equity position meaning they owe more than their home is worth.
However, this is a best-case scenario, as it is widely thought the Zillow valuation estimates are high because they do not take in account many of the actual foreclosure related sales that made up some 42% of all sales in the state of CA last month and even a larger percentage in other ‘bubble states’.
This massive flood of foreclosed properties coming back on the market at discounts to recent comparable sales is in part responsible for the 32% median price decline in CA in the past 14 months.
• Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages.
• Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity
• For those who bought at the 2006 peak of the housing market, 45 percent are now underwater.
• Almost one-quarter of U.S. homes sold in the past year were for a loss.
• “For homeowners who need to sell, this is a gravely serious situation,” Humphries said in an interview. “It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.”
• The highest percentages of homeowners with negative equity were located in California. In four of the state’s metropolitan areas - mortgage debts exceeded the values of their properties topped 90 percent,
• In five more California areas - the percentages were more than 80 percent.
• Prices fell on a year-over-year basis in 140 out of 165 markets,
• The Zillow Home Value Index is the median 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 company said. The index at the national and metropolitan area levels is calculated using a weighted average of the median home value for each county, Zillow said.