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* 1 in 5 markets show signs of "double-dip" in home prices
* Home value bottom expected in second quarter
* More than 1 in 1,000 homes was being foreclosed in Dec
By Julie Haviv
NEW YORK, Feb 10 One of every five U.S. home
owners owed more on their mortgage than their home was worth in
the fourth quarter, a trend that poses a serious threat to the
U.S. housing market's recovery, real estate website Zillow.com
said on Wednesday.
Homeowners with "underwater" mortgages are more prone to
defaults and foreclosures. They typically do not qualify for
refinancings and are unable to sell their homes because they
would need to cough up cash at closing time to pay off their
The percentage of American single-family homes with
mortgages in negative equity rose to 21.4 percent in the fourth
quarter from 21 percent in the third quarter, according to the
Zillow Real Estate Market Reports.
U.S. home values declined again in the fourth quarter, as
the Zillow Home Value Index fell 5 percent year-over-year and
down 0.5 percent quarter-over-quarter, to $186,200. It was the
12th consecutive quarter of year-over-year declines, the
"The prevalence of markets in or near a double-dip
situation shows that we are not yet at the bottom, in terms of
home values," Stan Humphries, Zillow chief economist, said in
One in five, or 29 of the 143 markets tracked by Zillow,
had at least five consecutive month-over-month increases in
home values during 2009 before values began to flatten or fall
again in the second part of the year. These markets included
the Boston, Atlanta and San Diego metropolitan areas.
Zillow said it defines a "double dip" as two periods of
sustained declines in home values separated by a brief period
of stabilization or recovery.
Zillow forecasts a definitive bottom in home values in the
second quarter of 2010, Humphries said.
"It is important to note, however, that the arrival of the
bottom does not mean that recovery is around the corner," he
Home values in 29 markets, including the Los Angeles and
New York metro areas, increased on a month-over-month basis
throughout the fourth quarter. The rate of increase, however,
slowed from November to December in 21 of those markets.
Meanwhile, the number of homeowners losing their homes to
foreclosure across the country rose to a new high in December,
with more than one in every thousand homes being foreclosed,
the highest since Zillow began recording national foreclosure
data in 2000, the reports showed.
Foreclosure resales remained high, making up 20.3 percent
of all U.S. home sales in December. Foreclosure resales also
made up the majority of sales in several metropolitan areas,
including Merced, California, at 68.3 percent; Las Vegas, at 64
percent, and Modesto, California, at 62 percent. Additionally,
28.5 percent of home sales nationwide sold for less than what
the seller originally paid.
Home values increased year-over-year in 27 of 143 markets
and remained flat in 15.
(Editing by Leslie Adler)