Zillow: 40% of home sellers took a loss in March

Zillow: 40% of home sellers a a loss in March
By Mary Ellen Podmolik
Copyright © 2010, Chicago Tribune
May 10, 2010 8:31 AM
http://www.chicagobreakingbusiness.com/2010/05/40-of-home-sellers-took-a-loss-in-march-zillow-reports.html


An expiring tax credit brought more buyers into the market this spring, but that didn't mean home sellers profited handsomely from the increased demand.

Forty percent of all homes sold in the Chicago area in March sold for less than the seller paid, according to a new report scheduled to be released Monday.

The study by Zillow.com also found that 31.8 percent of all single-family, detached homes with mortgages in the Chicago area were underwater at the end of March, meaning the homeowners owned more on the loans than the properties were worth. At the end of December, 27.5 percent of local home mortgages had negative equity.

Nationally, 23.3 percent of single-family homes with mortgages were underwater in March, up from 21.4 percent in December. Zillow's data is based on public records.

"The transactional volume of what's selling is quite different than the prices," said Stan Humphries, Zillow's chief economist. "[The 40 percent] is a pretty good indicator of how much pain there is in the market."

Among the communities where more than two-thirds of the homes sold for a loss in March were Carpentersville, Glendale Heights, Huntley, Lindenhurst, Park Forest, Round Lake, South Elgin, Waukegan and Zion.

Where did sellers have the best shot of making a profit? According to the report, at least 75 percent of the homes in Buffalo Grove, Elmhurst, Evergreen Park, Hinsdale, LaGrange, Mount Prospect, Niles, Norridge, Palos Heights and Riverside sold for a gain in March.

Within Chicago, 62 percent of homes sold for a gain in March, or 57 percent of single-family homes and almost 70 percent of condos.

Given the continued decline in home values nationally, Humphries now believes that the housing market won't bottom until the third quarter, but that doesn't mean the fourth quarter will bring real improvement. "We think once we've hit bottom, we're looking at three to five years of negligible appreciation," he said.

Zillow provides community-specific data.