South Florida homeowners saw their values slip another 3.3 percent in the last three months of 2010, as home-sellers ended the year with more slashed prices and continued to sell at a loss, according to a report released Wednesday by real estate firm Zillow .
In the fourth quarter, Zillow’s home value index for Miami-Dade and Broward counties dipped to $139,000, a 15.4 percent decline from 12 months earlier.
Since the June 2006 peak, home values have fallen 54.7 percent in South Florida, the largest drop among the top 25 markets covered by Zillow. The number of homeowners who owe more on their properties than the current value has risen to 42.8 percent.
“Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom,” said Dr. Stan Humphries, Zillow chief economist.
In the fourth quarter of 2010, foreclosures slowed considerably, as banks struggled to deal with newfound irregularities in their document filing process and allegations of “robo-signing.”
Still, short sales – transactions where a home is sold for less than the outstanding mortgage – plodded along: 46.7 percent of South Florida sellers took a loss in December. That’s down slightly from three months earlier, but up from 46.2 percent in December of 2009.
While short sales are seen as preferable to foreclosures, they come with their own stress for buyers and sellers alike.
When Juan Gutierrez, a university researcher, was offered a job in Columbus, Ohio, last year, he put his Hollywood house on the market. He had several offers – but all below $170,000, far shy of the $215,000 he owed. He reluctantly agreed to a short sale, but said his lender would not agree until he missed payments on his mortgage.
He spent months trying to negotiate with the bank, and three of his potential buyers moved on. He had to slash the price even more in order to sell the home, and miss payments for two consecutive months, damaging his credit.
“I now have two missed mortgage payments on my credit,” said Gutierrez in response to a query from The Miami Herald. “My credit is just wrecked. Trying to buy a house is impossible.”
Low-priced short sales and foreclosures were the preferred choice of buyers in 2010, causing even traditional sellers to cut prices to compete. One in five home sellers cut prices in the last quarter, according to Zillow, with an average reduction of 9.4 percent.
Home values in South Florida are now back to the level they were at in May 2002, the report found. Nationally, values have fallen 27 percent from their 2006 peaks.
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