Home values showed the sharpest quarterly declines since 2008, falling 3% in the first quarter this year, according to Zillow’s real estate market report.
Zillow said national prices were down 8.2% year-over-year to $169,000. Since peaking in June 2006, home values have fallen 29.5%.
Out of the 132 markets covered by Zillow, 97% saw home value decreases during the first quarter. Gainesville, Fla., had the largest quarterly price deficits, down 10.4%, followed by Ann Arbor, Mich., at 8.2%.
Of the top 25 MSAs covered by Zillow, the biggest difference in quarterly prices was seen in Detroit, down 5.2% to $70,600. Minneapolis-St. Paul and Chicago were both down 4.8%, with home prices averaging at $159,000 and $167,900, respectively.
Only Fort Myers, Fla., Champaign-Urbana, Ill., and Honolulu experienced price increases, with home values rising 2.4%, 0.8% and 0.3%, respectively. Home values in Sarasota, Fla., remained flat during the same time period.
“Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” said Stan Humphries, chief economist at Zillow. “With accelerating declines in the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011.”
Zillow also reported that negative equity reached a record high in which 28.4% of single-family homeowners with mortgages are underwater. This is a 1.4% increase from the 4Q10.
As banks unfroze moratoriums and allowed foreclosures to resume, there were more foreclosures throughout the country in the first quarter. In March, one out of every 1,000 homes was foreclosed.
“We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later,” Humphries said.