For the 12th straight quarter, home values declined year-over-year, according to property search and valuation site Zillow. The site released its fourth-quarter 2009 real estate market report Wednesday.

Home values declined 5 percent between fourth-quarter 2008 and fourth-quarter 2009, and 0.5 percent from the third quarter of 2009 to the fourth, to a median valuation of $186,200. More than 1 in 5 mortgaged single-family homes, 21 percent, were "underwater," meaning the owners owed more on the house that it was worth. That negative equity rate remained virtually unchanged quarter-over-quarter.

In a sign of an impending "double dip" in the housing market, 20 percent (29 out of 143) of metropolitan areas Zillow studied had flat or decreasing home values after at least five straight months of increases during 2009. Zillow defined a market experiencing a double dip as one that saw decreasing monthly home values of at least 1 percent for at least five consecutive months, followed by a similar increase in monthly home values, followed by a similar decrease.

Markets that already fit this definition are Augusta, Ga., Greeley, Ohio, Harrisburg, Pa., Lancaster, Pa., and Oklahoma City, Okla. Home values in these cities range from $110,000 in Augusta to $180,900 in Lancaster.

Major metro areas in danger of a double dip include Atlanta, Ga., with a median home value of $153,100; Boston, Mass., with a median value of $321,000; Denver, Colo., at $211,500; San Diego, Calif., at $354,900; and San Jose, Calif., at $562,600. …CONTINUED

"What we saw in mid-2009 was a brief respite from a larger market correction that has not yet run its course. The good news is that, for those markets that will see a double dip in home values before reaching a definitive bottom, this second dip will not be a return to the magnitude of depreciation seen earlier, but rather will look more like a modest aftershock of the earlier downturn," said Stan Humphries, Zillow’s chief economist.

Foreclosures also reached a record peak in December — more than one in 1,000 homes was foreclosed on — the highest number since Zillow began tracking national foreclosure data in 2000.

One-fifth, or 20.3 percent, of all U.S. home sales in the fourth quarter were foreclosure resales. They were the majority of sales in several metro areas, including Merced, Calif. (68.3 percent), Las Vegas (64 percent), and Modesto, Calif. (62 percent), although the California cities showed a 14 percent decline in such resales year-over-year. Sin City resales increased 1.77 percent from the fourth quarter of 2008.

Over a quarter, 28.5 percent, of homes sold for less that what the seller originally paid, with the sharpest difference in El Centro, Calif., where homes sold for 25.2 percent less than the seller’s purchase price, followed closely by Las Vegas, where homes sold for 23.47 percent less.

Home values appreciated year-over-year in 27 markets of the markets studied, and remained flat in 15. Peoria, Ill., saw the biggest increase in home values, 11.33 percent, to a median of $110,800.


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