Home Price Bell Curve Moving Down to 2004 Levels
The latest home value estimates from Zillow.com contain an interesting set of numbers on Los Angeles-area homes that are worth less than their mortgages.
Only about 1% of LA-area homes purchased in 2003 have negative equity, Zillow reports. But a bell curve emerges, with 24% of homes purchased in 2004 now underwater. The peak year for home purchases that are now in negative equity was 2006 – 71% of homes purchased then are now upside-down and some estimates are that home prices are down as much as 40% from the 2007 peak. About 56% of homes purchased in 2007 have negative equity.
The negative-equity percentage falls to 13% in 2008, tied to the sharp drop in home prices. Buyers are now making median down payments of 20% of the purchase price, Zillow reports, up from a 10% median down payment in 2007 and a 5% median in 2006.
The median price for all homes and condo sales – including new and existing models – dropped to $348,000 in the six-county Southern California region last month, down from the market peak of $505,000 in July 2007 and down slightly from $355,000 in June, MDA DataQuick said.