Unfortunately, it seems, every passing day brings new, often distressing data about the U.S. Real Estate Market. Today, the data comes from Zillow.com, and The Chicago Sun-Times, regarding the prevalence of Negative Equity here in the Chicago Real Estate Market.
Recent Zillow.com data indicates 37.8% of Chicago Area Homeowners who purchased their homes during 2006 may be upside down in their mortgage. In other words, they owe more on their home loan than their house is worth today.
The figure is slightly more favorable for those who purchased in 2007 - only 31.1%of these homeowners have negative equity in their homes. Going back five years in aggregate, however, shows greater long-term stability that a real estate investment typically offers. Only slightly over 3% of those who purchased in 2003 have the same predicament in negative equity.
Zillow.com data is often used by homeowners, as well as those considering buying or selling a home, to calculate an estimate on their home's value based on recently-sold and active MLS and public data from their neighborhood. Of course, these computer models cannot take into account features and condition of the interior of a specific home, but they offer initial guidelines for many consumers.
Data from Zillow, which varies from that obtained through other sources, pins the peak of the Chicago Area Real Estate Market in the Second Quarter, 2006. Since that time, the company calculates the median home price in the Eight-County Chicago Metro Area, which includes Northeastern Illinois and Northwestern Indiana, has fallen 8.8%.
Between June, 2007 and June, 2008, the median home value fell 7.3% across the Chicago Metro Area - to a $244,353 median - for single family homes and condos.
Amy Bohutinsky of Zillow says Chicago is experiencing a similar rate of equity decline as other market areas - although it is faring far better than other U.S. metro areas. "140 of 165 markets reported declines. In none of those has the rate of decline slowed," Bohutinsky says. "That tells us there isn't a bottom in housing prices yet."
Another Zillow statistic tracks the percentage of homes sold at a loss, versus the current owner's original purchase price. During the Second Quarter, 2008, 19.8% of homes in the Chicago Area sold for a loss, compared to 13.4% a year ago. Aggregating all houses sold during the past five years, according to Zillow data, only 4% sold for a loss versus the current homeowner's original price.
See our post this afternoon @ BlogChicagoHomes.com. The post links to the Chicago Sun-Times article by David Roeder and Francine Knowles. Here is a map showing declining home equity in the Chicago Metro Area, also from the Chicago Sun-Times today.
DEAN & DEAN'S TEAM CHICAGO
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