33% Of Homeowners Say Their Homes Depreciated In Value In February

A new survey from Reuters and the University of Michigan found that a third of homeowners felt their homes lost value in February, compared to 16% a year ago. For the first time in the survey’s history (we don’t know how long they’ve been doing it, but they cite numbers from as far back as 1992), “the proportion of homeowners who reported falling home prices was greater than the proportion that reported gains.”

Just 25 percent reported gains in their home’s value, down from 48 percent in February 2007 and the peak of 76 percent in mid-2005.

When asked about prospects for the year ahead, 27 percent of all home owners in February anticipated additional declines in home prices, up from 21 percent in January and 12 percent in March 2007.

Homes in the West seemed to suffer more than in the South, and “The most frequent and the largest percentage declines were reported by homeowners whose homes were valued in the top third of the distribution.”

“More homeowners say their homes depreciated: survey” [Reuters]
(Photo: Suburban Cowboy)

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  1. joerdie says:

    My loan is upside down by a few thousand. It’s a bummer but I seemed to have dodged the bullet so far. I just keep fixing and remodeling in the hopes that once homes start appreciating again, I can move up.

  2. ger-hardt says:

    My house went down over $6,000…
    VERY upsetting…

  3. laserjobs says:

    Amazing it is only 33% who have figured this out yet. I guess all that sunshine pumping on the TV keeps most people in the dark.

  4. Gorky says:

    I wonder how they found so many people that get their house apprised monthly since that is the only way they would know that it went down 33% just in February. Secondly if people didnt constantly flip their houses it wouldnt matter what its worth. What ever happened to buying a house and living in it till you die. My Grandparents did it, My parents did it and IM gonna do it. These are probably the same people who lease cars and get a new one every 3 years instead of buying one and driving it till it wont run anymore. Such a waste of money

  5. Ihaveasmartpuppy says:

    Ours went down too. Fortunately we are paying ahead on our mortgage so we are not upside down, and we have done improvements ourselves to keep the value up. What’s really upsetting is that while the value has decreased, the taxes have increased. Scary times.

  6. lostalaska says:

    Yeah in my town of Juneau, Alaska they wanted to raise the millage rate people freaked out so they didn’t, instead everyone’s house appraisals went up about 10-15% so the city still got it’s rate increase it wanted. So now I’m in an overpriced house whose market value has been artificially inflated by the city to help cover their budget deficits… fantastic.

  7. joerdie says:

    @Gorky: Your generalization is wholly inaccurate. I pay cash for cars every ten years, and trade in whatever I have. I do plan on dieing in a house that I pay off, but in my case, it won’t be this one. Did you ever think that it might be smarter to purchase a starter home and move up?

  8. Hoss says:

    Reuters: Maybe try — “A record number of homeowners in February thought their homes decreased in value” Otherwise the sentence refers to decreasing value in February

  9. less_is_best says:

    GREAT! I am looking at a house tomorrow. Sold for $197,000 in 2005. It was on the market for $179,000 for 7 months. No buyers. It is now in foreclosure for $135,000 and I’ll bet if I offer $115,000 the bank would jump at it. Then again, I am in CT on the east coast and the market here is PLUNGING! Off the cliff type scenario. I feel sorry for the poor dummy who paid $197,000 for it. Oh well, I have cash in the bank and its about time I am on the “right” side of a deal. :)

  10. BlondeGrlz says:

    @Gorky: It’s not so much about flipping as it is life changes. Sometimes you think you’re done moving around and you buy a house, only to find out a year later than your job is transfering you/your mother needs full time care/you get a divorce/you have quadruplets. I’d love to buy one large house and live in it forever but that’s not always possible.

  11. BlondeGrlz says:

    @less_is_best: I live in CT and we had a house in my town just do that EXACT same thing. It actually closed for $121,000 last week. I wouldn’t say the market is “off a cliff” but now is certainly an excellent time to find deals. But remember, someday when it’s your turn to sell you’re certainly going to hope prices are back on the upswing.

  12. SarcasticDwarf says:

    @Gorky: It has a lot to do with where the jobs are now. Jobs are increasingly specialized which results in people having to move long distances each time they change jobs.

  13. czarandy says:

    This is great (for me). We’re no longer redistributing wealth from buyers to owners. Hopefully prices will continue to plunge.

  14. blitzcat says:

    Mine is up 18K from what I closed for 18 months ago. :0

  15. Me - now with more humidity says:

    You haven’t lived until you’ve been upside down by $230K.

  16. Bryan Price says:

    Let’s see. 16 year old house (for my wife, 7 years for me) Not planning on moving out at the current time. Two realtor listed houses (on formerly a renter now unoccupied), on house that’s been over six months waiting to be flipped (or rented as the sign now says), and two others that are owner-seller. The fact that the flip house hasn’t moved in six months I think is telling. The house is up at least 100% since it was bought, probably closer to 150%, and would probably be 200% or more if the exhuberation had continued.

    At least two houses in the neighborhood have successfully found renters. And that’s just the very small neighborhood around me, all within a 1/2 mile radius. If I went actively looking for those just in my area, I’m sure I’d fund a bunch more.

  17. GearheadGeek says:

    @laserjobs: There’s also the fact that the markets that didn’t have a huge rise in prices aren’t having a big drop. People who’ve been paying insane prices on the west coast are getting crushed, while more normal markets aren’t seeing the same degree of depreciation. Big risks lead to big rewards, or big penalties.

  18. balthisar says:

    I don’t know that my value dropped. My SEV is up, but that’s meaningless. I just assume that because I’m in the metropolitan Detroit area, that I couldn’t sell my house for what I paid for it. I won’t have realized a loss until I actually sell it, so who’s to say if it’s worth more or less. If your simple definition is, “what could you get for it today?” then that’s not a fair question, because that depends on finding someone “today” to make an offer. If I left it on the market for a month, three months, a year, then what could I get for it? Who knows. Probably have to realize a small loss. Not significant, but still, a loss is a loss.

  19. balthisar says:

    Oh, not a subprime loan, and I plan on being here for a while, so I’m not really worried about it in the short term. It just means not leveraging equity for home improvements, which would increase the value. Instead, improvements will be incremental. ::shrug::

  20. irid3sc3nt says:

    Where is the photo from?

  21. IJReilly says:

    My favorite part about this is that, as a baby boomer, I’ve enjoyed years of appreciation… and I’ll STILL gain even more equity at the expense of the younger generation. Have fun working yourselves out of debt!!

  22. badgeman46 says:

    People are ignorant. “If I put in granite counter tops, my house gains 20 grand, whoopee!.” Unfortunately its not the way markets work. Plus, what do you expect when you have houses, or anything for that matter, that appreciate exponentially more than inflation. Ever watch a Barret Jackson auction? That 70′s clunker is appreciating, while your 2005 house is losing value. Strange times, indeed.

  23. Gorky says:

    @badgeman46:

    There is the problem. You put in granite counter tops that cost you maybe $6000, why should the value of the house increase by $20,000. It should increase by no more than what the counter tops cost

  24. balthisar says:

    I put in granite countertops, but only because the price was competitive with all the artificial stuff, and the look was just fantastic. I had no idea, though, that my house was supposed to increase $20,000 in value! Damn, maybe I’m not upside down after all!

    The funny thing is, though, I really did install granite countertops, and the cost/utility value certainly made it worth it. And the resale versus Formica and its ilk has to be a little better, but $20,000 better? Who the hell really thinks this way? Seriously — who? WTF?

  25. BrentNewland says:

    @irid3sc3nt: “Stumbled upon this massive old farmhouse near Hunter Mountain in Upstate, New York. This shot doesn’t come close to capturing the entire building.”

    God I want it bad

  26. loueloui says:

    @IJReilly:

    We’re going to stick you in a home if you keep that up.

  27. laserjobs says:

    The new mantra: “Priced In Foreverrrrrrr”

  28. Bunklung says:

    The good news is that you can’t miss the bottom of the real estate market. So hold onto your money folks and lets the show continue to slide.

    Don’t forget to file abatements with your town or city so your real estate taxes reflect the decreased value. Yes, swallow the pride and give in, you’re house went down. Reap the only benefit which is lower property taxes.

    A recession will compound the down turn in the real estate market too. That will be interesting.

    Also, the property value could stay historically high right now and stop deflated, but that doesn’t mean inflation/stagflation will crush home values too.

    My guess? Another 20% gone in the next 3 years. Then, home prices will continue to fall against inflation.

    So we’ll see that 450k home in 2005 hit 400k today, then 370k in 3 years. 10 years later it’s still 370k, but we’re all making 20% more.

    Historically, rent vs housing costs have remained relative the same. So rent is either going up sky high or housing is going to continue to fall.

  29. badgeman46 says:

    @Gorky:

    My point is that a lot of improvements people do are actually depreciative, and they just assume that it will magically add huge gains in equity. For instance, I am sure lots of people gained value in the 70′s by adding shag carpet and putting in “harvest gold” appliances. But today you would say “what a dump!” Today’s stainless steel and granite could easily be yesterday’s wood paneling and shag carpet. There is no gimme in putting money into a house. It is simply worth what someone will pay.

  30. BrianH says:

    Home appreciation is not some moral right or a guarantee.

    If you buy your home as an investment instead as a homestead, you could always consider renting.

  31. My title 8 trailer in my appliance junk yard seems to be holding it’s value. I paid $50 for it and it has to be worth at least that much now. I have been told that my DirecTV Dish nailed to the roof is worth more but who really knows for sure. If I could just find my coffee pot in all this junk.

  32. madanthony says:

    Asking people if they think their homes have depreciated seems pretty meaningless.

    I honestly have no idea how much Casa De Mad would fetch if I put it on the market, because real estate is fickle – if someone happens to really like the house while it’s listed I could do OK.

    Zillow does say that it has dropped in the last month – by $500. Of course, it also says it’s appreciated $15,000 in the last 18 months, which I have a hard time swallowing.

  33. Thanks for using my photo for the article! Cheers!

  34. This story is reported like it’s a bad thing. I don’t get it.

    Uhm Reality to Everybody: THERE WAS A HOUSING BUBBLE (in plain english, if you’ve bought property while Bush has been president, you paid more than it was really worth by any standard other than the market). This is a correction, not a catastrophe. It’s a catastrophe for people who are looking to flip their house in the short term, but I don’t have sympathy for them.

    On the flip side, someone we all know (me), doesn’t own a house, is about to get a chunky raise, relocated to a cheaper city, and interest in buying your now lower value home. Nice.

  35. GearheadGeek says:

    @badgeman46: “Ever watch a Barret Jackson auction? That 70′s clunker is appreciating, while your 2005 house is losing value.”

    ..er… well, the vast majority of “70′s clunkers” wouldn’t be accepted for sale at Barrett Jackson (or any other auction besides a scrap auction.) There are a few comparatively rare or unique cars (that still wallow and squeal like the ’70s roadpigs they are, they’ve just got big engines and low numbers) but by and large ’70s cars aren’t appreciating. You can’t compare a ’71 Buick GS Convertible to a 2005 tract home, even though I wouldn’t pay as much as the owner wants for either one.

  36. irid3sc3nt says:

    @BrentNewland and @suburbancowboy:

    Thank you for the information on the photo! Old houses are intriguing and this one is by far the most intriguing one I’ve seen.

    Y’all might like this site.

  37. @irid3sc3nt:

    If you click on the link with my name in it at the bottom of the article above, it will go to my flickr page. When I took the photo, I didn’t know much about the building. I was taking a detour to Tannersville, New York, and I saw the place. I found out a little more about the building through comments left on the page. It was an old hotel.

    The photo is geotagged, so you can see exactly where it is on the map.

  38. dandd says:

    I feel sorry for most people in this predicament, but for those of us looking for a house, this is good news.

  39. Starfury says:

    I bought long enough ago that the current decline still means my places is 250%+ more in value than I paid for it.

    I feel bad for people that bought to live in and are getting shafted, but the house flip people stuck with property: Tough.