Watch the Video: People owing more than house worth WTNH.com
Updated: Wednesday, 06 May 2009, 7:30 PM EDT
Published : Wednesday, 06 May 2009, 7:05 PM EDT
Story by: Chris Velardi
(WTNH) - It's a tough time for homeowners. The values of their homes are dropping and according to a new report, one in five owes more than the home is actually worth.
The real estate market has been at the center of the economic crisis and a new report from the real estate website Zillow.com is probably gonna make you feel real good about things.
The study estimates home values in the U.S. have fallen $704 billion in 2009 and $3.8 trillion in the last year.
That's the bad news.
The good news, News Channel 8 found some experts who say the numbers don't tell the whole story.
Barbara Pearce, the President of H-Pearce Realtors, doesn't believe they paint the whole picture.
"You're trying to compare something that is a long-term investment, at a point in time, and there's always gonna be a question about; is it a fair point in time?" said Pearce.
The numbers are part of a report from the home value tracking website Zillow.com -- which indicates a sharp drop in home values over the last year.
These aren't selling prices; these are estimated values what your house would be worth if you sold it today.
In Connecticut, the percentage of 'underwater' homes is slightly lower than the national average.
But again, Pearce said the numbers are a bit misleading.
"If the median person, which I've heard, financed in the last few years financed 97-percent of the purchase price, it doesn't take much to put you underwater," said Pearce.
Peter Grabel is a private mortgage banker with Stamford-based Luxury Mortgage Corporation.
He also thinks the Zillow numbers are inflated.
"My understanding is that they used the original mortgage balance and not the balance that someone might have been paid down to, which could be substantially lower and also on home equity lines; they're using the full amount of the line and not the line that's drawn," said Grabel. "And there could be a substantial difference."
But most important -- according to Grabel -- is all real estate statistics are relative. It's a reminder echoed by Pearce who said real estate must be measured very locally.
"Sometimes it's street to street, it's not even neighborhood to neighborhood; it's certainly not even town to town," said Grabel.