Home values fell 2.6% between the third and fourth quarters, their largest drop since the first quarter of 2009, as any push from the home buyer tax credits evaporated, said the latest Zillow Real Estate Market Report.
On a year over year basis, the decline was nearly 6%. At the end of last year 27% of American homeowners owed more than their property was worth, vs. 23% at the end of the third quarter.
"While the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place," said Zillow chief economist Stan Humphries. "Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we're getting closer to the bottom."
The top 25 market with the smallest quarter-to-quarter decline in values is Riverside, Calif., down 1.3%. At the other end of the spectrum are Detroit, down 7.5%; Chicago, down 6.5%; and St. Louis, down 6.1%.
The nation's two largest markets, New York and Los Angeles, were down 2.4% and 3.3% respectively.
