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ST. LOUIS NEWS TODAY - Sunday, November 16, 2008
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One-Third of Americans Who Sold Their Home in the Past Year Lost Money
ST. LOUIS, MO, (PRNewswire-USNewswire), November 16, 2008 - Home values in the United States posted their seventh consecutive quarterly decline, falling 9.7 percent year-over-year to a Zillow Home Value Index(1) of $202,966, according to the third quarter Zillow Real Estate Market Reports(2), which encompass 163 metropolitan areas.
The continued declines in value are causing more homeowners to sell their homes for less than the home's original purchase price. Over the past 12 months, 30.2 percent of homes sold were sold for a loss, up from 23.7 percent at the end of the second quarter. In 17 markets - 14 of which are in California - more than half of homes sold in the past year were sold for a loss.
The percentage of homeowners with negative equity remained fairly steady from the second to the third quarter as more foreclosures were completed and as median down payments rose in 61 markets. One in seven (14.3 percent) of all homeowners across the country has negative equity, and of homeowners who bought in the last five years, almost one-third (29.5 percent) are underwater.
Meanwhile 27 of the 163 metropolitan statistical areas (MSAs) covered by Zillow's reports are experiencing longer-term impact, showing negative annualized value changes over the past five years, and 12 of the markets show flat five-year annualized returns. Most affected by long-term depreciation were hard-hit areas in California's Central Valley, like Stockton, where the five-year annualized change is -3.8 percent. Also affected are areas like Greater Boston, where the five-year annualized change is -1 percent, and the Cleveland area, where the change is -0.8 percent.
Foreclosures made up almost one in five (18.6 percent) of all transactions in the past 12 months. Not surprisingly, areas with the highest foreclosure rates are the markets with some of the greatest home value declines. In California's Central Valley, 57.6 percent of transactions in Merced were foreclosures, and in Stockton, foreclosures made up 56.4 percent of transactions. The New York metro area continued to have the lowest rate of foreclosures, with only 3.5 percent of all transactions being foreclosures.
It's not all bad news, however: 12 of the 163 markets in the report experienced year-over-year change in value of more than 1 percent. Most of the bright spots were in the Carolinas and upstate New York, with the Ithaca, N.Y. area experiencing a year-over-year change of 5.6 percent and the Rochester, N.Y. area seeing a 3.1 percent increase. Home values in the Jacksonville, N.C. area increased 3.9 percent and were up 3.4 percent in Winston-Salem, N.C. None of those markets experienced bubbles, but instead have seen steady year-over-year growth for the past eight years.
Some homeowners continue to be largely oblivious to the reality of the housing market, however. According to the third quarter Zillow Homeowner Confidence Survey, nearly half of homeowners (49 percent) believe their own home's value either increased or stayed the same over the past year. But based on the third quarter Real Estate Market Reports, almost three-quarters (74 percent) of all homes lost value in the past year.
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Online Consumers Plan to Spend Less in Stores, But Slightly More Online This Holiday Season
ST. LOUIS, MO, (PRNewswire-USNewswire), November 16, 2008 - Online consumers intend to spend less in stores this holiday season than last year, The Conference Board and TNS report, but slightly more online. Consumers will be expecting free shipping and deals not available in stores when they shop online.
The Consumer Internet Barometer, a quarterly report produced by The Conference Board, the global business research and membership organization, and TNS, a global market insight and information group, surveys 10,000 households across the country and tracks who's doing what on the Internet.
"Given the current economic environment, it is no surprise that consumers are reigning in their spending and seeking bargains," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Free shipping, exclusive online deals, coupons and discounts are among the incentives consumers will be expecting this season." Bargain hunting will remain the driving force behind online sales, the report notes.
Even though online shoppers plan to spend less in stores this holiday season, planned spending online is up slightly, compared to the same quarter last year. Online households planning to spend more than $500 in stores declined to 16 percent from 21 percent last year. Those planning to spend more than $500 online rose to 5 percent from 4 percent last season.
Those planning to spend between $100 and $499 in stores declined to 57 percent from 61 percent last year, while those planning to spend that amount online edged up to 36 percent from 35 percent last year.
Online households planning to spend less than $100 in stores increased to 22 percent from 16 percent last year. Those planning to spend that amount online rose to 32 percent from 29 percent.
Among bargain hunters, men are more likely than women to surf the Internet searching for deals. Only 41 percent of women compared with 48 percent of men are self-proclaimed bargain hunters. Last resort shoppers and hurried shoppers, however, are more likely to be women. About the same proportion of men and women are Internet die-hards and traditional shoppers.
Shipping charges, which are the most frustrating aspect of online shopping, tend to frustrate women more than men, 47 percent versus 38 percent respectively. The ongoing sentiment among online holiday shoppers is that free shipping, coupons and discount offers would encourage them to spend more online. About 93 percent of women versus 87 percent of men say free shipping would serve as a motivation to spend more online this holiday season.
More than 71 percent said special offers and deals not available in stores would boost their online spending, with little difference between men and women. More than 70 percent of women and 68 percent of men said they would be willing to spend more if merchants offered coupons/discounts. In concert with shipping cost frustrations, 48 percent of women say they would spend more online if sites offered free return postage, compared with 39 percent of men who felt this way.
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