US Q1 home values see biggest drop since 2008 -Zillow

NEW YORK Mon May 9, 2011 12:01am EDT

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NEW YORK May 9 (Reuters) - U.S. home values fell in the first quarter at the fastest rate since late 2008, real estate data firm Zillow Inc said on Monday, suggesting that a bottom will not be seen until 2012 at the earliest.

Zillow said its home value index fell 3 percent in the first three months of the year from the previous quarter, and was down 8.2 percent year-over-year.

The number of homeowners under water -- or, those who owe more on the mortgage than their house is currently worth -- amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009.

That was up from 27 percent in the fourth quarter of last year.

Foreclosures also rose, following the moratoriums that had been in place in late 2010. In March, one out of every 1,000 homes was in foreclosure.

Given all those factors, it is unlikely home values will reach a bottom this year, Zillow said, and the firm pushed its forecast out to 2012.

"Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011," Zillow chief economist Stan Humphries said in a statement.

Almost all of the 132 markets covered by Zillow saw home value declines. Only Fort Myers in Florida, Champaign-Urbana in Illinois, and Honolulu, Hawaii, managed quarterly increases. (Reporting by Leah Schnurr; editing by Gunna Dickson)

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