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Zillow report: Homes with higher values see steeper drops

Negative equity is more likely for buyers of lowest-value homes

High-value homes tend to decline in value at a steeper rate than lesser-value homes in a declining market, according to an analysis by real estate valuation and marketing company Zillow. The analysis is based on a review of the company's estimates of home values over time -- the company refers to these estimates as Zestimates. The company broke homes into five categories of home values, each representing 20 percent of the market, to analyze differences in the performance of each market segment. During fourth-quarter 2007, Zillow estimated that home values dropped 3 percent nationally compared to the same quarter last year. In the bottom 20 percent of the value spectrum, which represents properties priced below $140,999, Zillow found that prices fell 0.7 percent in fourth-quarter 2007 compared to fourth-quarter 2006. That contrasts with a 7.5 percent year-over-year decline in the fourth quarter for properties in the top value category, which represents properties priced ab...

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