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Home values remained relatively unchanged in the third quarter, declining 0.2 percent compared with the second quarter, according to Zillow’s third quarter Real Estate Market Report.  The Zillow Home Value Index declined 4.4 percent year over year to $171,500. Home values have fallen 28.8 percent since they peaked in June 2006. A lower rate of foreclosure liquidations, coupled with relatively flat home values, led to an increase to 28.6 percent of single-family homeowners with mortgages underwater, compared with 26.8 percent in the second quarter. While the pace of foreclosures has slowed, liquidations remained high in September, with 8.7 out of every 10,000 homes being liquidated.Regionally, home values have weakened in the majority of the metropolitan statistical areas (MSAs) covered by Zillow, with 105 out of 157 markets declining from the second to the third quarter. Comparatively, 66 out of 157 markets declined between the first and second quarters of this year.More info

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Current home sellers who purchased their home in 2007 or later are overpricing their homes by an average of 14.1 percent, according to analysis of for-sale listings on Zillow. By comparison, sellers who bought before 2002 price their homes about 11.6 percent over market value, and those who bought between 2002 and 2006 price their homes 9.3 percent above market value.
Zillow compared the asking price of 1 million for-sale homes with those homes’ previous purchase price, then factored in the change in the Zillow Home Value Index at the ZIP code level to determine that home’s current market value.
Zillow also surveyed homeowners who plan to sell their homes in the next four years. Those who purchased their home in 2007 or later are more likely to base their asking price on the original purchase price of their homes, with 17 percent saying the purchase price would be the primary factor in that decision, according to a survey.
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